The U.S Gains Increasing Influence On Global Oil Prices

 In early February the number of oil swaps linked to oil production in Texas hit a record high. And since former president Obama lifted the ban on US oil exports in 2015, sales of U.S crude abroad has risen 10 times. 

This made the U.S. a player in global oil price-setting, and climbed up to the place of the world’s biggest oil producer. Finally OPEC has a worthy challenger for the first time in its history. This was so dramatic it that many analysis claimed that OPEC was dead, killed by US oil production. Even if this proved to be a premature statement, the price-setting power of the United States on the oil market has certainly increased significantly. Most of this increase came last year, after the European Union began sanctioning Russia for its invasion of Ukraine. So the obvious alternative for energy hungry European economies was the oil produced by the United States, reports Oil-price. 

Last year U.S oil shipments to Europe increased by 70 percent due to the sanctions on Russia. Exports to China also hit a five-month high in January 2022 at 187.000 barrels daily. Even if this is a relatively small amount it could well grow further if Chinese refiners demand stays strong. OPEC is certainly not dead but it certainly has a price-setting competitor to reckon with. 

The WSJ also reported that U.S oil is not just being sold to traders and refiners. U.S oil-based derivatives contracts are being used as a hedge against price volatility further increasing the prominence of U.S oil production.