If U.S.-led attacks knock out oil fields controlled by Islamic State militants, petroleum from the American drilling boom could make up for any shortfall on global markets, a report released by a Republican senator said on Wednesday.
U.S. bombs blasted Islamic State positions in Syria for a second day on Wednesday. Militants have been funding their efforts in part by seizing a dozen or so oilfields in Syria and Iraq, controlling refineries and smuggling oil and fuel to nearby markets.
In the United States, fracking and other advanced drilling techniques have helped push U.S. oil production to the highest level since the 1980s. That has led to a glut of light oil that many refiners are not able to process, and a call by some lawmakers to relax or lift the 40-year ban on oil exports.
“The historic growth in U.S. oil production could easily make up the shortfall to global oil markets,” if Islamic State facilities are wiped out, said a report released by Alaska Senator Lisa Murkowski, the top Republican on the chamber’s energy committee.
Murkowski and other supporters of lifting the export ban have also urged using U.S. oil supplies to pressure Russia over its intervention in Ukraine. Russia is a major producer and exporter of oil and a top supplier to Europe.
It is unclear exactly how much oil production is in control of Islamic State militants. The output appears to be less than 100,000 barrels per day, Adam Sieminski, head of the U.S. Energy Information Administration, told the North Dakota Petroleum Council at its annual meeting on Wednesday.
Sieminski’s office, part of the Department of Energy, and the State Department are working on getting more precise numbers, he said.
The amount, however, is very small compared with the global market of about 90 million barrels per day. And concerns about oil prices damaging the world economy have ebbed for now. Brent crude oil prices, a global benchmark, hit 2-year lows of $96 per barrel on Wednesday.
Still, the world’s spare oil capacity, or the amount crude producers can quickly bring on line without major investments, is only a few million barrels per day and is held mostly in Saudi Arabia.
The Obama administration opened a crack in the crude oil export ban earlier this year with two approvals to ship minimally processed light oil known as condensate, but such approvals have been put on hold since then.