With the Iran sanctions looming, international oil markets are looking for alternative crude suppliers. The United States and the European Union (EU) as well as many others, have initially turned to Saudi Arabia. However, there is uncertainty of the Saudi’s ability to fill in the production gaps given the recent turmoil over a murdered Saudi Arabian journalist. One source of additional crude production available is Russia, according to Igor Sechin, the Chief Executive of Russian oil major Rosneft.
The U.S. typically sees a drop in gasoline prices as demand begins to tail off at the end of the summer travel season. This year is breaking the trend with gasoline prices sitting at their highest for the season since 2014, due in large part to the global oil price rally. AAA reports that the national price average was at $2.867 as of Wednesday, September 26th. Gasoline prices were 27 cents higher per gallon than they were at the same time last year, and this backwards trend could continue into the fall and winter seasons.
Natural gas continues to be an increasingly important force within the United States Energy sector, and Pennsylvania is a cornerstone state for natural Gas production. According to the EIA, only Texas is responsible for producing more natural gas than Pennsylvania in the United States. Mass energy producers need mass distribution networks, and the Atlantic Sunrise natural gas pipeline out of northeastern Pennsylvania will help distribute natural gas all along the eastern seaboard as far south as Alabama.
There’s been a lot of talk about the U.S. increasing its domestic crude oil production for the sake of exportation, but where exactly is that crude oil being shipped to? A large portion of the exports will be going to the world’s fifth-largest oil importer, South Korea. South Korean imports of U.S. crude are expected to hit all-time highs in September and October, with 6 million barrels coming in each month.
India and China are currently discussing forming an Oil Buyer’s Club to counter the market power of OPEC. OPEC currently exists to stabilize the price of oil and reduce volatility, by either artificially raising the price of crude, or opening up their spigots and driving prices back down when competition starts to gain momentum. India and China are also trying to gain support from Japan and Europe to further strengthen their counter-OPEC position.