By Sonny Atumah
In most parts of Africa the bride-price or dowry is an exchange of wealth between intermarrying families, often accompanied by payment made by the groom to the bride’s family. In other societies Africa, the dowry is a bit confusing. Dowry in some societies means an amount of money or property given by a bride’s family to her bridegroom or his family when she marries. To yet another group, it is an amount of money or property transferred by a man to his bride when they marry. Between America and China energy world, technology is determining who pays and how the dowry may be paid. Both countries investments in technology reinvent the wheel of who is the bride or groom to control global energy.
Last Monday the Louisiana Offshore Oil Port, LOOP, said it successfully completed the first loading of a very large crude carrier, VLCC that headed for China. The fully laden Saudi Arabian supertanker, Shaden with a gross tonnage of 154252 tons headed for the port of Rizhao, China. It was the first time a VLCC was deployed to lift crude from the only deep water port 18 miles off the coast of Port Fourchon in Louisiana, in the United States.
The infrastructural improvement has impacted on cost effectiveness and the level of efficiency. Before now supertankers for crude exports were loaded offshore from shallow ports using smaller ships that shuttle cargoes in multiple trips. The new export capacity at LOOP will allow the supertankers to deliver foreign crude into the U.S. and depart with a back-haul rather than returning empty.
Beyond infrastructural developments are the geopolitical imperatives that America has to fulfill as a global power monger. Many securocrats know that petroleum is an instrument of policy, tact ant strategy. America was pitched against the Arabs in the early 1970s. By 1973 it faced one of its greatest energy challenges wen the Middle East members in OPEC slammed an embargo on the United States for resupplying Israel when it was attacked by Egypt and Syria in the Yom Kippur war. The embargo was from October 1973 to November 1974.
President Richard Nixon’s Address to the Nation about National Energy Policy on November 25, 1973 initiated Project Independence 1980; a series of plans and goals that by the end of that decade, Americans will not rely on any source of energy beyond their own. The researches Nixon ignited yielded fruits four decades after, in what is now the Shale revolution that has a ripple effect in global oil instability. Having cleared all obstacles that led to the ban which was for fear of America running out of oil 44 years ago the shale boom is making America to ruminate in flurry to take on her rivals in OPEC and cold war period, Russia in the oil price war.
The shale boom that drove American crude to a discount spurred an unprecedented surge of relatively cheap shipments to Asia. That was a pain for top OPEC producers such as Saudi Arabia, which had their market share threatened as they implemented output curbs to clear a global glut. American crude exports have reached a record high of 2.1 million barrels since the ban on crude export was lifted in 2015. America is still a net oil importer, but imports dropped by about 3 million barrels per day, bpd as a result of large shale extractions. China surpassed U.S. as world’s biggest crude importer in April 2015. Experts say the United States became a major crude exporter because of the rapid growth of U.S. light, sweet shale crude production coupled with the fact that U.S. refining system operates mostly on heavy crude.
The United States light, sweet crude is readily available for export from multiple terminals; shipped in vessels of all sizes, easy to process. China is its single largest buyer for waterborne sales where oil is shipped from A to B. Chinese refiners meet tightening product sulfur specifications and priced to be exported. With Chinese refinery runs increasing, refiners are looking for crude from all potential sellers. And with OPEC embedded in output cut, rising U.S. sales are the best alternatives for China.
Some have asked whether it is likely this trend would continue. China is the world’s largest net importer (imports minus exports) of total petroleum and other liquid fuels. It needs new refinery capacity, increased inventory stockpiling in its Strategic Petroleum Reserves, SPR since its domestic oil production is declining.
The United States Energy Information Administration data said in 2017, 56 percent of China’s crude oil imports came from countries within the OPEC, a decline from the peak of 67 percent in 2012. Russia increased its market share of Chinese imports between those years from 9 percent to 14 percent. Russia surpassed Saudi Arabia as China’s largest source of foreign crude oil in 2016, exporting 1.2 million bpd to China in 2017 compared with Saudi Arabia’s 1.0 million bpd. OPEC countries and non-OPEC including Russia, agreed to reduce crude oil production through the end of 2018, which may have allowed America to increase market share in China.
Some oil experts have little wonder why America has the Chinese appeal. Beijing said it would launch a Yuan-denominated oil futures contract on March 26, a long-anticipated move aimed at boosting the pricing power of the world’s biggest crude importer. If successful, it would challenge the dominance of Brent and West Texas Intermediate futures contracts while loosening some of the dollar’s grip on global markets.