U.S. Redraws World Oil Map

Could the shale oil boom reach a level in which the US surpasses Saudi Arabia as the world's largest oil producer?  According to new estimates by the International Energy Agency, this shift could occur by 2020 transforming not just energy supplies but also U.S. politics and diplomacy.

Data courtesy of this WSJ article

• Higher U.S. oil production doesn't necessarily mean lower prices at the gasoline pump, because oil prices are set on the global market, and U.S. oil is expensive to extract. U.S. oil consumption last year also dropped to 18.9 million barrels a day, down 8.4% from 2006, and the IEA projected continued declines in coming decades.
• The IEA suggested that newly found U.S. energy independence could redefine military commitments. OPEC will continue to be the powerhouse of global production, the agency said, but a growing portion of its output will go to nations like China and India instead of North America.
• China already receives half of its oil imports from the Persian Gulf, while the U.S. receives less than 20% of its imports from the region. U.S. military protection of Middle East sea lanes has for decades been a core mission of the Navy's Fifth Fleet, at an estimated cost of between $60 billion and $80 billion a year. Given the high U.S. budget deficit, looming defense cuts and what many perceive as an overstretched Navy, that mission could come into question.