Gaining control of global oil production is often treated as a catch-all explanation for America’s wars. It was used in the case of Iraq, though the reason that then prompted Washington to overthrow Saddam Hussein in 2003 is more accurately understood as being motivated by the desire to curb Saudi influence in the Gulf by re-establishing a Shiite Iraq. The explanation of oil is being used again today when it comes to Iran, Syria or even Venezuela. Nothing could be further from the truth.
A Deeper Look
The United States is the only thalassocracy left in the world after the United Kingdom bowed out at the end of World War II. The United Kingdom’s decline was shown up by the 1956 Suez Crisis when, we should remember, the US intervened to force its allies to accept a ceasefire in view of the events in Europe. This left the US and the Soviet Union as the only powers capable of controlling the destiny of the globe.
The American thalassocratic empire has always sought to prevent a continental power from becoming hegemonic in a specific region. Seen in this perspective the two world wars proved inevitable, and even today US strategy responds to this need. As for oil, Washington has tried, wherever possible, to control production through its oil companies rather than resorting to the actual instrument of war. This has been all the more evident in recent years due to an energy policy that has enabled the United States to radically change its position on the international crude oil market.
Uncle Sam: From Importer to Exporter
September 2019 marked a historic breakthrough for the United States: in that month, for the first time, oil exports exceeded imports, recording a difference of +89,000 barrels per day for the first time since 1973, the year when data began to be measured on a monthly basis.
If we look at the balance sheet for the whole of 2019, net imports, i.e. the difference between imports and exports, the figure stands at an average of 530,000 barrels per day, equal to 2.7% of average daily oil consumption in the United States. This figure is the lowest since 1949, year when the US Energy Information Administration first started recording data. As for natural gas, the US began exporting it in 2017 for the first time in 60 years, thanks to the revolution in exploitation of an unconventional resource, namely shale gas.
Exports Surge Thanks to Shale Revolution
Oil exports from the United States have nearly always hovered around 100,000 barrels a day, except for a brief period between 2001 and January 2014, when they even fell to one-tenth of this value. But subsequently they began to grow in May 2014 and then rapidly arrived (starting from 2016) at the current values hovering around an average of 3.4 million barrels, peaking between September 2019 and April 2020 thanks to another unconventional resource: shale natural gas.
This growing trend has gone hand in hand with a rise in national energy production, which increased 64% in the three-year period 2015-2018 alone, reducing net imports to 4% of total national consumption. This is the key to Trump’s miracle of relaunching domestic industrial production and reducing unemployment to historic lows, an effort now totally frustrated by the current pandemic.
What About COVID-19?
The pre-pandemic forecasts regarding the energy balance calculated the turnaround in 2020: this was to be the year when the United States would export more energy than it imports, a situation it had not experienced since 1953, but with much higher internal consumption than at that time and even compared to just a decade ago. The collapse in global demand in recent months due to the pandemic could have affected this trend, but since it is a contingent and non-structural cause, it is likely that it has only been delayed, although we have to rely on estimates awaiting a complete reopening of economic activities.
To return to oil (though it would be better to speak of hydrocarbons), it is interesting for our purposes to see where American oil ends up and above all where imports to the US come from. Most of the crude produced by the United States – 2018 data – goes to Asia (750,000 barrels/day). China takes the biggest slice (376,000 barrels/day), followed by Europe (550,000 barrels/day) with Italy in first place among importers (165,000 barrels/day), then followed by Canada (334,000 barrels/day) and finally Central and South America, the Middle East and Africa. As for imports, the top five countries exporting oil to the United States are Canada (49%), Mexico (7%), Saudi Arabia (6), Russia (6%) and Colombia (4%). If we look at the Gulf states as a whole, they account for just 11% of the oil imported by the US, while with the OPEC countries the figure is up to 18%.
The Underlying Reality
These figures show clearly that the United States has not become an exporter of oil and hydrocarbons in the strict sense, but still depends on imports, although most are from countries that are not in crisis areas where there is a US military presence. Hence the argument that American wars are driven by the attempt to control oil fields loses much of its force. American oil companies have sometimes benefited from the outcomes of some conflicts, but not as much as one might think (as in the case of Iraq). However, it also belies the Trumpian narrative that sees the United States as energy independent and no longer bound by oil from the Middle East, though, as we have seen, this dependence is now reduced to a small part of the total.
This general picture of US exports and imports of oil and hydrocarbons shows that Washington’s strategic interest lies in controlling the trade routes by which they travel, hence the shipping lanes. The United States, being a thalassocracy, has always been committed, thanks to its powerful Navy, to guaranteeing freedom of navigation to keep shipping routes open. The current confrontation with China over the South China Sea is approaching, though not solely, because of this perspective. Moreover, if we look at other sectors in crisis now or in the recent past, we can also see how control of the principal straits, called choke points, are the fulcrum of American naval strategy. The oil and gas tankers that connect the United States to the rest of the world still travel through them and rely on them every day.
-Translated by Audrey Sadleir