America's Leg Up on Petrochemicals

Peter Zeihan 4 min

The Iran war has created a global oil shortage that makes the United States the only functional large-scale supplier of key petrochemicals. The next two years will see a shattering of petrochemical supply chains on a global basis outside of North America.

Chapters

  1. 0:00

    The US Advantage in Petrochemicals

    The United States uses cheap natural gas to produce petrochemicals, unlike the rest of the world which relies on oil. The Iran war has caused a global shortage of oil, making it impossible for other regions to produce petrochemicals. The United States is becoming the only real functional large-scale supplier of key petrochemical groups.

  2. 2:20

    Shift in Production Quantities

    The US advantage allows for a significant shift in production quantities and qualities globally. The next two years will see a shattering of petrochemical supply chains outside of North America.

Key points

  • 0:00

    The United States has a bottomless supply of natural gas due to the shale revolution.

  • 0:00

    Natural gas is significantly cheaper in the United States compared to the cost of oil.

  • 0:00

    The United States uses natural gas to produce products that everyone else would use naphtha for.

  • 0:00

    The Iran war has caused a global shortage of oil to the tune of about 10 to 12 million barrels a day.

  • 0:00

    Everyone in the East Asian Rim and very soon everyone in Europe simply can't access the product they need at all.

  • 0:00

    Everyone else lacks enough natural gas to switch over or change their hardware.

  • 0:00

    The United States is becoming the only real functional large-scale supplier of butadiene and methanol groups.

  • 0:00

    The United States can produce most petrochemicals at a significant cost advantage versus everyone else.

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