U.S. oil exports reach milestone: June shipments highest since 1957
By Reuters Media on Aug 7, 2014 at 11:47 p.m.
NEW YORK — News this week that U.S. crude oil exports had surged in June to reach the highest since 1957 raised a question not often asked: Why did U.S. exports suddenly surge, then just as quickly drop, nearly six decades ago?
In March 1957, the United States exported a record 455,000 bpd of crude, up from just 40,000 bpd in the same month a year earlier, data from the U.S. Energy Information Administration showed. A year later, exports were back to just 27,000 bpd.
Unlike the current export boom, fueled by new shale oil drilling technology that has unleashed an unprecedented revival in U.S. production, the abrupt rise and fall in the 1950s was the result of political turmoil in the Middle East.
In July 1956, Egyptian President Gamal Abdel Nasser nationalized the Suez Canal, the waterway constructed some 90 years earlier connecting the Mediterranean Sea to the Red Sea. The 101-mile seaway was a crucial link between big oil producers and European refiners, ferrying some 1.2 million bpd to Western Europe, particularly to Britain and France.
The move was seen as punishment for the United States and Britain withdrawing funding for the Aswan High Dam, but it also stung European nations who were losing sway over former colonies and led to a global struggle known as the Suez Crisis.
Israel, France and Britain moved troops into the region to assert their control, bringing commercial oil flows through the canal to a halt — with dire consequences for Europe. Alternative routes were far too long to compensate.
“(The oil) could go around the Cape Horn, but that was difficult and there was limited shipping capacity,” said Dr. Philip K. Verleger Jr., president of consultancy PKVerleger LLC and a former advisor to President Carter.
At the time of the nationalization, Britain had around six weeks’ worth of supply of oil on hand, and France had only slightly more, according to Rose McDermott’s book Risk Tasking in International Politics.
Amid pressure from Washington and growing economic strain, oil-starved nations in Europe removed their troops from territory and the United States started pushing crude oil across the Atlantic. By November 1956, oil exports jumped to 285,000 bpd from 47,000 bpd a month prior, according to the EIA data.
The Canal reopened in April 1957, allowing Europe to resume direct shipments and bringing a quick halt to U.S. exports. ...
The current rise in exports has been more measured and is likely to be much longer-lasting. Shipments from U.S. shores in June rose to 389,000 bpd, a 35 percent increase from May, with most of that oil going to Canada.
But while the exports have recently reached modern-day highs, they are still a much smaller fraction of U.S. supply.
“Back then, a couple thousand barrels a day would be a big deal. But now, we’ve got a story of the North Dakota and Texas boom and a production figure of some 8.5 million barrels a day.”
http://www.thedickinsonpress.com/content/us-oil-exports-reach-milestone-june-shipments-highest-1957
Yellow is current market.
Pink is some interesting history re Suez Canal Crisis and small peak in US oil export.
Current news: US crude oil export SURGED ... and here's why:
current export boom, fueled by new shale oil drilling technology that has unleashed an unprecedented revival in U.S. production,
I'm new to looking at this stuff and thought that shale was only connected with gas/LNG.
I'm unclear how crude oil and shale drilling are connected.
Is crude oil the same as 'shale oil'? No idea. Random site has this to say about 'oil shale':
Oil shale is unevenly distributed around the world. The United States possesses roughly 70% of world oil shale deposits, with the vast majority located in the Green River shale regions in Colorado, Utah and Wyoming.
Fears over domestic energy supplies sparked small oil shale booms in the 1950’s due to Cold War energy concerns, and again in the 1970’s as a result of the Arab oil embargo. But by 1980, the federal government had assembled a pot of subsidies, price supports, loans, and other incentives luring major oil companies to make substantial investments in the Piceance Basin area of western Colorado. This boom would be short lived. On May 2, 1982 -- “Black Sunday” -- ExxonMobil pulled out of oil shale due to falling oil prices and vanishing federal subsidies. The economy of western Colorado collapsed and the entire state of Colorado entered an economic slump as a result.
Reemergence of oil shale
Oil shale has returned to the world stage due to rising oil prices and concerns about national energy independence. What has not changed is the lack of a technology capable of turning oil shale rocks into transportation fuels in a commercially viable manner. [SOURCE]
Not sure about that last point. Couldn't see a date on the page, so I don't know how current the info is.
As I understand there's a shale boom, so the 'lack of technology' part doesn't sound right.
There's three types of shale energy deposits - here - Liquid (shale oil), Gas (shale gas) and Solid (oil shale). The first two are good; the solid form is crap commercially because it's not easy to break down for fuel.
I think I need to go to shale school, because I'm still not really clear on how 'crude oil' relates to shale.
Anyway, thanks to current technology, there's a boom in crude oil production and export in USA!!!
HELLO, EUROPE!!!
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