A record number of supertankers are heading to the United States to load crude oil, signalling a major shift in global energy supplies as war in the Middle East disrupts traditional export routes. Almost 30 of these vessels, each capable of carrying 2 million barrels, are contracted to load US crude for a world market facing its biggest supply crisis in history. US crude exports have climbed by a third to a record 5.2 million barrels a day after Iran blocked flows of 10 million barrels of Gulf oil via the Strait of Hormuz.
The conflict has already dealt a severe blow to the Middle East's energy dominance. Saudi Arabia, the world's largest crude supplier, has seen a third of its production erased in a matter of weeks. Analysts at Rystad Energy estimate that restoring the region's shuttered oil and gas fields and repairing drone-damaged infrastructure could cost between $34bn and $58bn, with a full recovery potentially taking years.
As doubts deepen over the Gulf's future market influence, attention is turning to the Americas. Almost half of the world's oil supply growth over the rest of the decade is expected to come from Latin America, with production offshore Brazil, Guyana, Suriname and Argentina's Vaca Muerta shale formation leading the way. These countries were projected to add almost 2.5 million barrels a day by the end of the decade, and higher prices could unlock a further 2.1 million barrels a day by the mid-2030s.
Venezuela is also poised for a resurgence, potentially increasing output by 1 million barrels a day by 2035. This could be significantly higher if major western oil companies heed calls to exploit its vast reserves, with Goldman Sachs predicting an increase of up to 2 million barrels a day. US refineries are already benefiting from the Latin American boom, with jet fuel exports to Europe doubling to an all-time high as the continent scrambles for supplies.
The war has exposed the world's reliance on Middle East energy and accelerated a pivot towards new suppliers. As Duncan Wood of the Pacific Council of International Policy put it: “Any right-minded government is asking how to reduce exposure, increase autonomy and diversify energy sources.”
