Oil price fall impact on US economy, meager

Tehran, Jan 3, IRNA - Altough the collapse in crude prices has benefited American households, the role of oil in the US economy is meager and its fluctuations do not adversely impact the country’s economy, wrote ˈIran Dailyˈ on Saturday. A glance at the US oil production plans formulated in the past few decades can shed light on why Washington has decided to lift the ban on its oil exports, noted the English-language paper in its Opinion column (pg 4). The plans had committed the country’s energy sector not to secure more than half its domestic needs from the world oil market. In other words, domestic oil production should have accounted for half of the entire US oil consumption.However, such plans were never fulfilled in the past, it noted. The US needs 19m barrels of oil daily, over half of which is supplied by imports. However, a surge in shale oil production reduced the need for crude imports. As a result, Washington was able to achieve its long-term strategy of cutting oil imports to less than 50 percent and exporting the black gold, it added. Undoubtedly, this achievement is rooted in the long-term plans devised by the US energy sector rather than a hike in shale oil production by certain companies. Hence, a decline in OPEC oil output will not create a hedge against the US strategy. Nonetheless, since the US oil production does not correspond to its domestic consumption, Washington is still not self-sufficient in crude production, it wrote. Besides, the US produces sweet crude oil, but its facilities are only capable of refining sour crude oil. As a result, Washington has to export sweet crude oil and import sour crude oil, it noted. A rough estimate shows that the value of sweet crude will slide, but it cannot make a major impact on the world oil market, concluded the paper. *Seyyed Mohammad Khatibi is Iran’s former representative in OPEC. (The article first appeared in the Persian daily Donya-ye Eqtesad)/end