North America’s Energy Boom & Latin America
Oil and gas production in the United States and Canada has increased considerably since 2008.
The recent decline in oil prices has been devastating to the government coffers of some of Latin America’s oil-dependent countries, including Venezuela, Colombia and Ecuador. But seldom mentioned is that lower prices may also have an upside for the region’s biggest exporters, as high-cost producers in competing Canada take a hit.
Over the past decade, many of the world’s most expensive oil fields were developed for the first time thanks to a sustained period of high prices. For years, the US boom was enabled by $100 crude that allowed producers to employ costly drilling techniques to extract oil from shale. Indeed, it is widely agreed that the surge in production of light oil from shale formations in the United States was a key driver in the eventual oil price collapse. The US crude benchmark West Texas Intermediate (WTI) has declined by more than half since June to around $45 per barrel.
Oil and gas production in the United States and Canada has increased considerably since 2008.
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Crude oil exports from Latin America to the US have plummeted as oil production in the region has slumped while demand is on the rise.