A recent study by Rystad Energy that was conducted over 3 years of 60,000 oil fields globally says that the United States is home to larger crude oil reserves than Saudi Arabia or Russia. Previously it was estimated that the United States have as little as 56 billion barrels of oil but this new study raises that figure to 264 billion barrels. This figure includes recoverable reserves from both discovered and undiscovered sources. Rystad report says oil reserves in Saudi Arabia is at 212 billion barrels and in Russia at 256 billion barrels. As per the Research global recoverable reserves stand at 2.1 trillion barrels.

So, what it means for the United States to have more oil?

• It clearly means that its geo-politics will be less reliant on oil. For decades, oil has been one of the key determinants of United States’ geo-political response. With plenty of oil, that relation is likely to change. Signs of that can already be seen from the strained relationship between the USA and Saudi Arabia.
• For decades now, Russia also had a major advantage over the United States with regard to oil. Many a time, it has used oil as a political tool. Now with oil from the United States threatening Russia’s dominant position the latter can hardly use it as a source of influence, especially in the European Union.
• In addition to the above, United States has discovered this vast chunk of oil reserves at a time when its energy policies shifting from oil to natural gas or to the cleaner resources. So the United States will use this oil as a political tool as well as a source of revenue.
• So far, Middle East has remained a key determinant factor in oil price level with its swing production, now over the next decade, the US will assume that position and the price will depend on the cost of production there.

WTI oil price is currently at $48 per barrel and Brent at $49.3 per barrel.