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Saudi Arabia to loose position of being the World’s Biggest Oil Exporter by 2025

Saudi Arabia to loose position of being the World’s Biggest Oil Exporter by 2025


For much of the past 75 years or thereabouts, the status of Saudi Arabia as the world’s undisputed energy hegemon has been taken for granted, with the kingdom exporting roughly 7 million barrels of oil per day, making it by far the world’s largest oil producer and one of the wealthiest countries on the planet. With this wealth has come huge foreign heft, availing the autocracy of an extremely close relationship with the U.S. and the unrestricted opportunity to expand its influence across the Middle East and North Africa.

The International Energy Agency (IEA) on Monday released a report showing that within the next six years, the U.S. will overtake Saudi Arabia as the world’s top oil exporter.

Driven by the shale oil boom and encouraged by a marked shift in American monetary policy, the U.S. has pumped oil in record numbers over the past few years, recently overtaking Saudi Arabia as the world’s top oil producer. Its impending domination of the oil export market however, heralds the start of something totally unprecedented in one of the world’s most important albeit unstable regions.

The major implication for oil prices though is that Saudi Arabia and Russia, which often collude to fix oil prices in the so-called OPEC+ arrangement will be significantly less powerful within energy markets. This is good news for net energy importers that are American allies like much of Western Europe, but not so much for China, which may find its energy prices effectively being controlled by its principal economic and geopolitical rival.

The major implication for oil prices though is that Saudi Arabia and Russia, which often collude to fix oil prices in the so-called OPEC+ arrangement will be significantly less powerful within energy markets. This is good news for net energy importers that are American allies like much of Western Europe, but not so much for China, which may find its energy prices effectively being controlled by its principal economic and geopolitical rival.

Source: CCN

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