Greg Abbott, governor of the state of Texas, hailed the US as an energy-independent country last week, saying on Twitter it would “NEVER AGAIN” be beholden to foreign oil producers. Yet the day before, Saudi Arabia — backed by Russia — pledged a “measurable” rise in output, largely in response to a request by the US to offset a loss in Iranian barrels after the reimposition of oil sanctions.
As the US tries to reset the Middle East, with the withdrawal from the nuclear deal with Iran a key element of its strategy, it is still turning to the energy might of traditional producers abroad. This reflects in part the limits of the US shale oil boom, and Washington is acutely aware of the domestic blowback should any move to cut Iran’s oil exports to zero result in higher petrol prices for American drivers. “The US still needs Opec to provide relief on oil prices,” said Jason Bordoff, director at Columbia University’s Center on Global Energy Policy. In an integrated oil market, US pump prices are affected by global supply disruptions regardless of how much the country produces or how little it imports, he added.