Oil supply facing changes

The oil market is expected to see plenty of changes in the coming years, due to restrictions on imports from certain countries, a growing demand for renewable energy and increased fuel development projects from different areas of the world. The supply chain is already changing as nations change up their procurement strategies to slash costs and cut trade agreements with certain countries.

Less oil coming from Iran
Iran, formerly one of the top oil exporters, has recently seen crippling international sanctions put a huge dent in its largest industry. Growing worldwide concerns about Iran's nuclear program have led most countries across the world to believe the nation is attempting to develop nuclear weapons, a claim Tehran denies. This belief has led many Western nations to cut economic ties with Iran and ban oil imports from the country.

The European Union just imposed a new set of sanctions on the country to increase economic pressure on the Iranian government. These new restrictions forbid EU banks from conducting business with Iranian banks unless the transactions are authorized for humanitarian aid. The EU hopes these sanctions, which cut off oil imports from Iran, will pressure it to stop its nuclear program.

The United States government has also taken steps to stop the import of Iranian oil. Sanctions already restrict oil purchases from the country, and, like in the EU, transactions with Iranian banks are closely monitored and in some cases impossible.

New procurement ideas
With Iranian oil an unlikely option, companies looking to purchase it are having to look to new sources to keep their businesses running. Fox Business reported that other Middle Eastern countries are increasing oil production to fill the void left by Iran. Iraq has ramped up its oil industry, and BP announced a plan to return some of its production to Libya after the country's dictator fell last year. Companies can use strategic sourcing practices to avoid getting their oil from countries run by totalitarian regimes or nations unfriendly to U.S. interests.

While the Middle East has long been a huge source of oil used around the world, other countries are tapping into their oil reserves to become energy independent and boost their exports. Fox Business reported that much of the growth in the oil supply industry is expected to come from the Americas in the next few years. New technology has allowed the U.S. and Canada to obtain more of the valuable export to use domestically and sell. The source revealed that U.S. oil production has reached its highest level since 1995.

Imports down in the US
Oil imports in the U.S. are reaching a new low - the country imported less oil in 2012 than in the past 15 years. Several factors could be leading to the lessened demand for oil, including increased production at home. With companies in the U.S. managing to increase production with new technology, there's less of a reason to purchase oil from other countries.

High prices at the pump have also lessened the demand for oil in America. With prices through the roof at some points, many are now driving more fuel-efficient vehicles, utilizing public transportation, walking and biking to save money on gas. Green technology has also led to a decreased need for oil in the country. With electric vehicles, solar power, wind power and other renewable sources providing inexpensive and plentiful energy, people are beginning to invest in new technology that doesn't call for oil. Fox Business reported that global demand for oil has been revised down - while the International Energy Agency previously estimated demand would grow at an average of 1.2 million barrels per day over the next five years, the number has been changed to 1.1 million barrels.

With the uncertainty across the globe, rising prices and new oil sourcing strategies, the world may become less dependent on the Middle East for oil supplies in the next few years.