The US is now the #1 producer of Oil
Per the government released information on 4/22/19 (US Energy Information Administration) With the US now the top world producer of oil and gas the global dynamics are changing. That being said, the US is also the top user of oil and gas. However, the difference is relatively small as compared to other countries.
What happens if the Strait of Hormuz is Blocked by Iran?
See the data comparing Oil Production and Oil Consumption by the major countries. Specifically, see the amount of difference between the US and China needs and the proximity of oil if the Strait of Hormuz is blocked due to a military conflict with Iran.
| Oil Production in million barrals per day | % of production | Oil Consumption in million barrals per day | % of Consumption share of the world | Surplus/ (deficit) in million barrals per day | |
|---|---|---|---|---|---|
| US | 17.87 | 18% | 19.69 | 20% | -1.82 |
| Saudi Arabia | 12.42 | 12% | 3.3 | 9.12 | |
| Russia | 11.40 | 11% | 3.63 | 4% | 7.77 |
| Canada | 5.27 | 5% | 2.47 | 3% | 2.80 |
| China | 4.82 | 5% | 12.79 | 13% | -7.97 |
| Iraq | 4.62 | 5% | * | * | 4.62 |
| Iran | 4.47 | 4% | * | * | 4.47 |
| UAE | 3.79 | 4% | * | * | 3.79 |
| India | * | * | 4.44 | 5% | -4.44 |
| Japan | * | * | 4.01 | 4% | -4.01 |
* Unknown data | However, the number is assumed to be small
Copyright 2019 – Mike Dunn – Mutual Fund Marketing Services, LLC (mutuafunddirectory.org)
Data Source: US Energy Information Administration – 4/22/19
Energy Risk Analysis For the US
With the tensions in Iran and the possible blockage of the Strait of Hormuz, The US only has a deficit of 1.82 million barrels of oil per day. With Canada having a surplus of 2.80 million barrels per day, the risk to the US economy in the event of a military blockage is not as great as in the past.
Energy Risk Analysis for China
China, on the other hand, has a far greater risk to its economy in case of an oil supply reduction. The Strat of Houmous is blocked due to a conflict, China could, in theory, buy the remaining surplus of Russia’s production. However, it is assumed that China is already buying a percentage of Russia’s oil exports capacity.
Data Source: US Energy Information Administration – 4/22/19