International Oil Buyers Turn to US Shale Amid Red Sea Attacks

The ongoing attacks on commercial ships in the Red Sea instigated by Iran-backed Houthi rebels are causing disruptions for global supply chains. Despite the chaos these attacks have created, American oil exports are benefiting as international buyers are shifting their demand towards the abundance of US shale oil supply. This shift is attributed to US shale being viewed as a safer and more cost-effective option for procurement, particularly for European customers.

In response to the attacks, many vessels are opting to reroute from the Red Sea to the Cape of Good Hope in South Africa instead of passing through the Suez Canal. This alteration in shipping routes results in longer and more costly journeys for the vessels. Consequently, a noticeable trend is emerging where buyers are opting to purchase oil from the US rather than relying on traditional Middle Eastern sources. This shift is evident in the significant increase in US petroleum exports, which rose by 35% to nearly 5.3 million barrels a day for the week ending December 29, as reported by the US Energy Information Administration.

purchasing oil from the US, avoiding the need for a US Navy escort and enjoying a reliable two- to four-week journey.