The regional war is accelerating an energy export boom across the Americas

The regional war is pushing more of the world’s energy trade toward the Americas, as buyers look for alternatives to Gulf shipments. Attacks on oil infrastructure and tankers in the Strait of Hormuz have cost global markets more than 2 bn barrels of crude, the Financial Times reports. Seven months into the war, customers are signing supply contracts and investing in North and South America to secure reliable supply.

Some trade flows have already shifted. Saudi crude deliveries to the US fell to zero in July, while US imports of Venezuelan crude rose to 18.2 mn barrels that month, up from a monthly average of 15.2 mn barrels in 2Q. US exports of crude and products such as diesel to Europe, Asia, and Oceania are up 15%, according to the FT.

Output across the Americas is rising fast. Countries from Canada to Brazil have set production records this year. Total North and South American output is on course to rise 10% in the two years to December 2026, according to Rystad Energy figures cited by the FT. Venezuela’s output is up 10% this year to about 1.2 mn bbl / d. Wood Mackenzie expects US shale output to reach about 11.8 mn bbl / d by December 2027, about 1 mn bbl / d higher than before the war.

The extra supply is weakening Gulf pricing power. The Americas can’t fully replace low-cost Middle East supply, but they are moderating global prices and will limit Opec’s pricing power, analysts told the FT. “The rise in production in the western hemisphere has taken the medium-term pricing discretion away from the Gulf Cooperation Council, particularly the Saudis,” said Schreiner Parker of Rystad Energy.

If you can’t beat them

Gulf producers are hedging by investing across the Atlantic. “Even countries in the Gulf will seek diversification by investing in the Americas,” Daniel Yergin, vice-chairman of S&P Global, told the FT.

Adnoc’s XRG is building positions across the region. It holds equity in all five trains of the Rio Grande LNG project in Texas and Argentina’s Vaca Muerta basin. It also took an equal stake with BP and Qatar’s UCC in Venezuela’s offshore Loran gas license, which is still subject to definitive terms and regulatory approval.

QatarEnergy is buying American gas to keep its customers supplied. The company has purchased 33 US LNG cargoes worth around USD 1 bn since the Hormuz disruption, Reuters reported. It is also negotiating multi-year agreements for another 2-3 mtpa through 2031. Its Golden Pass LNG terminal in Texas, a JV with ExxonMobil, shipped its first cargo in April. Only the first of its three trains is running so far, out of a planned 18 mtpa.

Aramco is locking in American LNG. It signed a 20-year agreement for 1.2 mtpa from Train 4 of NextDecade’s Rio Grande project, subject to a final investment decision. It has also signed a 1 mtpa agreement with Commonwealth LNG, with an option to double it. Separately, Aramco is raising its stake in MidOcean Energy to 49%, giving it an indirect 17.2% of Peru LNG.

Is the energy map redrawing itself?

Asia is the market with the most at stake. China and India are the largest takers of liquids moving through Hormuz. Japan sourced 94% of its crude imports from the Middle East in 2025, and Middle Eastern barrels made up 70% of South Korea’s imports in January-February.

Crude grades and freight costs favor the Gulf. Brazil’s crude is mostly lighter than the medium-sour Gulf grades that many refiners are built for, and Guyana’s output is mostly light sweet crude. Moving a supertanker of US crude to Asia costs roughly USD 52 mn, or about USD 26 / bbl, as of late September.

Gulf producers are also storing crude closer to Asian buyers. Aramco holds 5.3 mn barrels in South Korea, where Seoul has emergency purchase rights. Saudi Arabia and the UAE have asked Tokyo to increase their current 8 mn bbl stockpiles in Japan tenfold.

REMEMBER- Gulf crude has recovered faster than other exports: Middle Eastern crude exports had returned to roughly pre-war levels by late September, while diesel and gasoline shipments remained at 58% of their earlier volumes. Saudi Arabia’s crude exports averaged 8.1 mn bbl / d in the first half of October, up from 7.2 mn bbl / d before the war, as its East-West pipeline recovered and tankers resumed through Bab Al Mandab.