Quietly, thanks to the recent lifting of the 40 year old ban on oil exports from the United States, the geopolitical order that has adhered for decades due to the global oil and gas market is being upended, according to Bloomberg. Thanks to the fracking boom and the development of other technologies such as horizontal drilling, the United States has plenty of oil and gas to sell beyond its domestic needs. Because oil and gas are cheap on world markets, plenty of customers are eager to buy.
The winners of this new state of affairs are American oil companies and the American economy. The losers are countries such as Saudi Arabia and Russia which have used oil as a weapon to get its way from countries in Europe and the United States..
Back in 1973, in the wake of the Yom Kippur War between Israel and a coalition of Arab States, OPEC, led by Saudi Arabia, imposed an oil embargo on the West to punish it for supporting the Jewish state. Another oil shock occurred in 1979 when the Iranian Islamic Revolution occurred. In the meantime,Saudi Arabia is suspected of using its oil wealth to fund terrorism and radical jihadists,
Russia has been using its oil reserves to bend European countries to its will as it conducts military adventures in the Ukraine and Syria. Oil funds Russia’s military machine.
Now the shoe is on the other foot. If a country is threatened with an embargo from OPEC or Russia, the United States will be happy to step in and provide oil and gas as needed. A great deal of economic power has just passed from the hands of some of the world’s bad actors at the stroke of a legislative pen.
American oil exports will also keep the price of petroleum low, which will be of benefit to the economies of western countries.
In the meantime, renewable energy, including solar and wind, are starting to slowly take up more of a share of energy production.