By Javier Blas on 12/6/2018 VIENNA (Bloomberg) -- America turned into a net oil exporter last week, breaking 75 years of continued dependence on foreign oil and marking a pivotal -- even if likely brief -- moment toward what U.S. President Donald Trump has branded as "energy independence." The shift to net exports is the dramatic result of an unprecedented boom in American oil production, with thousands of wells pumping from the Permian region of Texas and New Mexico to the Bakken in North Dakota to the Marcellus in Pennsylvania. While the country has been heading in that direction for years, this week’s dramatic shift came as data showed a sharp drop in imports and a jump in exports to a record high. Given the volatility in weekly data, the U.S. will likely remain a small net importer most of the time. “We are becoming the dominant energy power in the world,” said Michael Lynch, president of Strategic Energy & Economic Research. “But, because the change is gradual over time, I don’t think it’s going to cause a huge revolution, but you do have to think that OPEC is going to have to take that into account when they think about cutting.” The shale revolution has transformed oil wildcatters into billionaires and the U.S. into the world’s largest petroleum producer, surpassing Russia and Saudi Arabia. The power of OPEC has been diminished, undercutting one of the major geopolitical forces of the last half century. The cartel and its allies are meeting in Vienna this week, trying to make a tough choice to cut output and support prices, risking the loss of more market share to the U.S. The U.S. sold overseas last week a net 211,000 bpd of crude and refined products such as gasoline and diesel, compared to net imports of more than 2 MMbpd on average so far in 2018, and an annual peak of more than 12 MMbpd in 2005, according to the U.S. Energy Information Administration. The EIA said the U.S. has been a net oil importer in weekly data going back to 1991 and monthly data starting in 1973. Oil historians that have compiled even older annual data using statistics from the American Petroleum Institute said the country has been a net oil importer since 1949, when Harry Truman was at the White House. On paper, the shift to net oil imports means that the U.S. is today energy independent, achieving a rhetorical aspiration for generations of American politicians, from Jimmy Carter to George W. Bush. Yet, it’s a paper tiger achievement: In reality, the U.S. remains exposed to global energy prices, still affected by the old geopolitics of the Middle East. While the net balance shows the U.S. is selling more petroleum than buying, American refiners continue to buy millions of barrels each day of overseas crude and fuel. The U.S. imports more than 7 MMbpd of crude from all over the globe to help feed its refineries, which consume more than 17 MMbbl each day. In turn, the U.S. has become the world’s top fuel supplier. “The U.S. is now a major player in the export market,” said Brian Kessens, who helps manage $16 billion at Tortoise in Leawood, Kansas. “We continue to re-tool our export infrastructure along the Gulf Coast to expand capacity, and you continue to see strong demand globally for crude oil.”
A sharp temporary drop in imports, coupled with steadily rising production levels, has seen the US become a net exporter of oil for the first time since the 1940s. While experts believe the state of affairs is set to be short-lived, with the country likely to remain a net importer under normal circumstances, the announcement highlights the growth of the US's shale extraction industry in recent years. Achieving "energy independence" has been a central goal of the Trump administration, with the US now having overtaken Russia and Saudi Arabia as the world's largest producer of petroleum.