The EIA recently published a report that shows that the US is now producing crude oil at a rate not seen since 1986. And it’s just as well.

In the grisly shadows of the beheadings in the Middle East, tensions between Ukraine and Russia, problems in Syria and Libya, crude oil prices have fallen, not risen. As reported in this week’s AZ China weekly report, crude oil prices are now down below $100.

The fact that prices have fallen not risen as a result of the turmoils around oil producing nations is due wholly and solely to the rise in shale oil production in the USA. Where the US was a major buyer, they are now a much smaller player in the international market.

But now according to some experts, we can put a value on the savings arising from this shock absorbing production increase. According to the former CEO of BP, crude oil prices would be at $150 today. Others have come out with similar estimates.

Based on the total amount of crude oil the world consumes, which is around 92 million BPD, that saving of more than $50 per barrel accumulates to a total saving of US$5.3 billion per day, using the WTI price of $92.

By any standard that’s an enormous saving. It also has huge repercussions for the strategic options being rolled out for governments in the USA, UK, Australia and elsewhere, not just in terms of singular issues at the present time, but for a considerable number of years ahead.

It also suggests that come the time that these ripples in oil producing nations are ironed out, the price of crude oil could well fall much further. If the price can drop in times of trouble, what will it do when the sailing is smooth?