After the Ukraine war, the U.S. was found to enjoy the opposite benefits of European countries restricting imports of Russian energy such as crude oil and natural gas. U.S. crude oil production hit an all-time high last year, when exports to Europe increased significantly. Experts analyzed that the prolonged war is helping the U.S. strengthen its global energy dominance.
Citing energy market research firm Kapler, the Wall Street Journal (WSJ) said on the 26th (local time) that crude oil exports from the U.S. to Europe jumped 38% year-on-year for a year since February last year when Russia invaded Ukraine. Imports of U.S. crude oil from Germany, France, and Italy increased significantly, while imports from Spain increased by 88%. European countries’ imports of natural gas from the U.S. doubled last year.
This is attributed to European countries’ replacement of shortfalls with U.S. energy products amid the European Union’s restriction on Russian energy imports after the war. Since December last year, the EU and the Group of Seven (G7) have implemented a ceiling on the price of Russian crude oil, and from this month, they have also decided to impose restrictions on exports of refined oil products. According to the International Energy Agency (IEA), the EU previously accounted for 60% of Russian crude oil exports. Russian oil and gas imports plunged 46% year-on-year in January, hit by Western sanctions. Experts evaluated that the U.S. is enjoying benefits such as strengthening its position in the energy market due to the prolonged Ukrainian war. In fact, U.S. crude oil exports to Europe in recent months have far exceeded those shipped from the Persian Gulf during the same period. Thanks to soaring exports to Europe, the daily average crude oil drilling in the U.S. hit a record high of 11.9 million barrels last year.
Some predict that U.S. oil companies, which have been passive in increasing production, will accelerate production of West Texas crude oil (WTI). This is because a widening price gap between WTI and North Sea Brent crude oil increases the incentive for crude oil traders to export U.S. crude oil. The price gap between WTI and Brandt Oil widened from USD 3-4 before the war to USD 10 last year.
