- The U.S. is becoming a major oil exporter, and Asia is the fastest-growing market
- However, Middle Eastern producers enjoy important cost advantages in selling to Asia
- U.S. tight oil is a bigger threat to West African or Libyan producers
When the first supertanker laden with crude oil left the Gulf Coast of the United States for Asia on February 18, 2018, it caused a media frenzy. Hailed as the beginning of a new oil trading era, the 2 million-barrel cargo set reporters to speculating that it would ignite a war for Asian market share between shale producers and conventional exporters, especially from the Middle East.
Since the lifting of a 40-year export ban in December 2015, thanks to the shale boom, U.S. oil has been sold to 33 countries. Asia is taking an increasing share of those sales. This trend is likely to continue, but it does not mean game over for Middle Eastern producers. In fact, of all the oil exporters to Asia, they should probably be the least concerned.