We’re no longer No. 1. And that’s a good thing.
The U.S. Energy Information Administration confirmed this week that China in September surpassed the United States as the world’s top oil importer. The report further highlights how the tight oil boom throughout the country in less than five years has reversed decades-long trends and upended long-held beliefs about world energy supplies.
The report shows domestic imports have dropped by more than a third in just more than three years, falling to less than 6 million barrels per day, down from more than 9 million barrels per day in early 2011. Of the remaining imports, more than half is from Canada and Mexico.
Another EIA report this week also points to how tight oil is affecting domestic and global oil markets. The agency data shows that in the fourth quarter of 2013, the United States represented 10.4 percent of the world’s total oil production and that more than 40 percent of the country’s oil came from shale and other tight oil formations.
This week’s reports echo the domestic oil industry’s emphasis on how increased oil production throughout the United States has significantly reduced domestic demand for crude from the Middle East.
But they also raise questions about the sustainability of the trend.
China surpassed the United States in imports far more because U.S. demand for foreign crude dropped than because Chinese demand increased. While imports into the United States have tumbled by more than 3 million barrels a day over the past three years, imports to China are up by less than 1 million barrels a day.
For now, that’s good news for producers and consumers alike.
Just a few years ago, global demand and global production were almost equal. In that world, even the hint of unrest in the Middle East or other key parts of the world was enough to send global oil prices surging.