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Oil continues to be a source of energy throughout the world.
Oil Fueling World Growth
A report issued earlier this week by the National Center for Policy Analysis indicates that the growing supplies of oil in the United States and Canada are not only improving domestic energy security but also helping to stabilize global oil prices.
Numerous disruptions to oil supply have taken place throughout the course of the last year. These include the Syrian civil war, widespread pipeline vandalism and oil theft in Nigeria and Sudan informing South Sudan that efforts would be made to block its oil shipments if it carried on supporting rebel factions in Sudanese border states.
However in spite of these events, oil prices have stayed remarkably stable. The National Center for Policy Analysis claims that one of the main reasons for this is the fact that markets have been cushioned by the new supplies of North American crude.
Stabilizing Global Oil Prices
If the NCPA is correct then it means that oil investments in American companies have helped to safeguard against events that had the potential to destabilize global oil prices.
Those who have chosen to invest in oil and gas have not only aided the U.S. economy but also indirectly benefited nations overseas by helping their industries to grow without being limited by heightened oil rates.
Deciding to invest in oil and gas companies in the U.S. helps everybody who relies upon oil, from individuals to companies.
It eases the financial burden placed upon those who are reliant upon this commodity.
Sanctions on Iran
The NCPA’S report highlights the fact that Washington implemented new sanctions against Iran in 2012 in a move that was aimed at curbing the nation’s nuclear ambitions.
Together with sanctions placed upon Iran by the EU, this significantly decreased the country’s oil exports.
However oil prices still experienced very few lasting effects.
Experts have put this down to the shale boom in the U.S. This demonstrates the cushioning effect brought about by the dramatic increase in American oil production.
Boosting the Economy at Home and Overseas
The benefits of the shale oil boom in the U.S. for domestic citizens are well known: it is creating jobs, boosting the economy and making the nation less dependent upon oil imports. However the NCPA’S report suggests that it is also benefiting the world as a whole.
Stabilized oil prices mean that companies and individuals do not have to constantly keep an eye on the news in case an event takes place that is likely to drive prices up.
U.S. oil production is fuelling economic growth in other countries by ensuring that they have access to a regular supply of moderately priced oil.
The current boom in domestic oil production is likely to continue well into the future, improving the domestic situation and bolstering economies overseas. It means that no single event is capable of having a dramatic effect upon the prices of oil.
This provides the U.S. with the power to impose sanctions on other countries without having to worry about the economic consequences. It improves the nation’s political clout and energy independence.
Image: L.C. Nøttaasen
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