Middle East oil troubles don't shatter the U.S. market as they used to
AMARILLO, Texas (KVII) — Drone attacks on two Saudi Arabia oil facilities, including the world's largest, took 5.7 million crude oil barrels per day off the market, accounting for about 6% of the global supply.
Drivers in the Texas Panhandle continue to watch prices at the pump increase as a result of the attacks.
According to AAA, on Monday, Sept. 23, Amarillo drivers were paying on average $2.35 per gallon of regular gas.
That price is about 16 cents more than on this day last week and is nearly 24 cents less per gallon compared to this day last year, according to AAA.
Karr Ingham, a petroleum economist for Texas Alliance of Energy Producers, said turmoil in the Middle East doesn't affect the U.S. markets like it used to.
Ingham said that is because over the last 10 years, U.S. domestic crude oil production has grown by about 7 million barrels a day.
"Crude oil prices are not high right now in response to this attack, which means gasoline prices are not going to be terribly affected by this," Ingham said. "This is great news for consumers in Amarillo, Texas and all across the United States and in fact globally, for that matter."
Ingham said the increase in domestic production means that the US has enough crude oil to supply the market, despite the geopolitical attack in Saudi Arabia.
"Had this event happened 10 years ago, crude oil prices very easily could have gone up by 50% in one day, maybe more than that," Ingham said. "So just the fact that we have really exploded domestic energy production and crude oil production, in particular natural gas, has really provided a buffer to consumers against events like this and so that's the reason that prices did not respond and terribly dramatic, certainly not catastrophic fashion."
Ingham says recent technological advances have allowed for better access to oil in Texas, specifically around the Midland-Odessa area.
"Simply because we've grown domestic production so dramatically, we're much less dependent on Saudi Arabian crude oil and Middle Eastern crude oil and crude oil from places where you tend to have geopolitical problems like this," Ingham said. "This just means we are much more energy independent than we have been in, I don't know how long, certainly in decades now."
