U.S. oil could step in if IS fields knocked out
Senator:American petroleum could make up for any shortfall on markets
Report released by a Republican senator said if US-led attacks knock out oil fields controlled by IS militants, American petroleum could make up for any shortfall on global markets, according to Reters.
The report has come out on Wednesday- the third day of US-led airstrikes targetting IS-controlled refineries in Syria.
"The historic growth in U.S. oil production could easily make up the shortfall to global oil markets," if Islamic State facilities are wiped out, said a report released by Alaska Senator Lisa Murkowski, the top Republican on the chamber's energy committee.
It is unclear exactly how much oil production is in control of Islamic State militants. The output appears to be less than 100,000 barrels per day, Adam Sieminski, head of the U.S. Energy Information Administration, told the North Dakota Petroleum Council at its annual meeting on Wednesday.
Sieminski's office, part of the Department of Energy, and the State Department are working on getting more precise numbers, he said.
The amount, however, is very small compared with the global market of about 90mn barrels per day. And concerns about oil prices damaging the world economy have ebbed for now. Brent crude oil prices, a global benchmark, hit 2-year lows of $96 per barrel on Wednesday.
Fracking and other advanced drilling techniques have helped push U.S. oil production to the highest level since the 1980s. That has led to a glut of light oil that many refiners are not able to process, and a call by some lawmakers to relax or lift the 40-year ban on oil exports.
The Obama administration opened a crack in the crude oil export ban earlier this year with two approvals to ship condensate oil, but such approvals have been put on hold since then.
Murkowski and other supporters of lifting the export ban have also urged using U.S. oil supplies to pressure Russia over its intervention in Ukraine.
Concerns about global oil prices being damaged by IS-controlled oil production have faded for now. Estimations point out that the current production levels are very small compared with the global market of about 90mn barrels per day. In the meantime, Brent crude oil prices hit two-year lows of $96 per barrel on Wednesday.
The world's spare oil capacity that can quickly be brought on line is only a few million barrels per day and is held mostly in Saudi Arabia.