North America Emerges as a Major Oil Exporter... Changing the Global Supply Map

[Image source=AP Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] The North American region, which was once an oil-importing area, is expected to transform into a major oil-exporting region in 20 years.

According to the Korea Petroleum Association on the 1st, by 2040, the world's major oil-exporting countries are expected to be reorganized into three countries: the Middle East (58%), Russia (13%), and North America (12%). As of 2017, the top three global oil exporters were the Middle East (60%), Russia (21%), and Africa (10%).

The biggest reason for the rise of the United States as an oil exporter was the lifting of the ban on domestic crude oil exports in 2015. Following the first oil shock, the U.S. had restricted crude oil exports since 1975. As a result, it was only able to export up to 500,000 barrels per day to certain countries such as Canada.

However, with the oversupply caused by the development of shale oil in the U.S., the oil industry lobbied for the lifting of the export ban. They argued that allowing crude oil exports would expand related markets and create hundreds of thousands of jobs domestically. Consequently, in 2015, both the Democratic and Republican parties in the U.S. lifted the crude oil export ban after 40 years.

Along with this, shale development has expanded in North America, including the U.S. and Canada, leading to an increase in export volumes from the region. In the U.S., production has continued to rise since the shale gas revolution in the late 2000s, while Canada mainly produces shale gas in the western regions.

In fact, the volume of oil imported from the U.S. surged from 2.44 million barrels in 2016 to 13.789 million barrels in 2019. Canadian imports slightly increased from 1.19 million barrels in 2018, when data collection began, to 1.37 million barrels in 2019.

An industry official stated, "The U.S. has already become a net exporter of natural gas due to the expansion of shale development," adding, "With the U.S. expected to further expand exports of oil and natural gas, the international resource market could undergo significant changes."