U.S. dependence on Russian oil becomes apparent
According to the Energy Information Administration, Russia has become a second oil supplier to the United States after Canada.
The thing is that the U.S. has lost heavy oil from Venezuela due to its own sanctions.And it's Russian oil that have the necessary characteristics. As a result, Moscow earned billions of dollars.
Last Autumn, the United States has become a net exporter of crude oil and petroleum products for the first time in at least 70 years. The nation exported 89,000 barrels a day more than it imported in September, according to data from the Energy Information Administration.
"The oil industry can deliver surprises - in this case, the shale oil revolution - that upend global oil prices, production, and trade flows," a former energy adviser to President George W Bush and president of the consulting firm Rapidan Energy Group, Bob McNally, told Bloomberg.
But since 2007, shares in an index of U.S. producers have fallen 31%. EIA estimates that production is set to expand by 400,000 barrels a day, the weakest growth since at least 2017. And U.S. oil output growth could decelerate by more than 50% in 2021 due to capital discipline or austerity in the Permian Basin.
Vestnik Kavkaza earlier reported that according to the Energy Information Administration's report, Russia increased its oil supplies to the U.S. to record levels last year. Supplies peaked in October, when Russia sold 20.9 million barrels of oil and oil products to the U.S. That month, it bypassed Mexico and was second after Canada.
In the year since the Trump administration declared an oil embargo against the Venezuela, the move has yielded some clear losers, including U.S. investors now shut out of the market, The Washington Post reported, adding that it has also produced one clear winner: Russia. "Deals between Moscow and Caracas to produce, transport and sell oil to other markets have become a cash cow for Moscow that is earning its state-controlled enterprises an estimated $120 million a month., the newspaper added.
Over the 11 months of last year, Russia sold 210% more crude oil to the U.S. - 31.2 million barrels - compared to 10.1 million barrels of the same period in 2018. But sales increased by only 163.5% - from $0.74 billion to $1.95 billion. The total value of Russian oil products exported to the U.S. for the reporting period amounted to $3.8 billion.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to Vestnik Kavkaza earlier, noted that Russian oil was the most suitable option to replace Venezuelan supplies.
"A lot of U.S. refineries specialize in refining Venezuelan oil, heavy and highly viscous, with a high yield of high-quality petroleum products. When the Americans started imposing sanctions against Venezuela, the question arose of where to get such raw material - and Russia's Urals oil, which is medium-grained, but quite similar to the Venezuelan, suits this purpose," Igor Yushkov said.
"As for the growth of petroleum products, this is naphtha, that is, primary processed oil, and fuel oil," the economist concluded.