On February 22, 2011, when global energy ministers met in Riyadh formally to sign the new IEF charter, the loss of supplies from Libya,  under Gaddafi then, haunted the minds of most men and indeed women present there on the day.Everyone from the then IEA Executive Director Nobuo Tanka to US Deputy Secretary of Energy Daniel B. Poneman and Charles Hendry, the then British Minister of State for Energy and Climate Change, were disturbed and even nervous, on oil market prospects and the volatility due to the outage. The crude world was about to enter unchartered waters, many felt there on the day.Although a sense of bonhomie too was there between the producers and the consumers, at the fabulously impressive King Abdulaziz International Conference Centre in Riyadh, that Tuesday, yet concern too was evident. Everyone had question marks about the impending situation and its overall impact on the energy world and indeed the global economy. And though both the sides of the global energy fulcrum seemed to concede that OPEC kingpin Saudi Arabia was ready to pump out, as much crude required to fill in the gap then, many had difficulties in getting through to the bottom of the issue despite all the permutation and combinations.The changing fundamentals of global energy balance over the last few years, seems to have taken out that sense of unpredictability, from the very equation. Despite the even greater outage from Libya today and war clouds hovering over the region continuing to impact the energy world, the markets are comparatively calmer today. The nervousness of February 2011 is simply missing, despite the fact that the geopolitical scenario today is much worse.Markets have definitely spiked. War clouds hover over Syria. Egypt is in turmoil. And Libya, that was keeping everyone on toes then, is still suffering. Its crude output – the light crude that most refiners, especially in Europe love to refine, is now just a trickle of what it was earlier. Libya traditionally has been producing somewhere around 1.6 million bpd, yet, today its output has fallen to mere 150,000 barrels per day. And as per the National Public Radio, exports from the war torn Libya is reduced further to just 80,000 bpd. Courtesy the dwindling Libyan output, OPEC oil supplies have fallen by 260,000 barrels to 30.51 million barrels per day in August, the International Energy Agency is reporting.
Yet, despite all this, sentiments are much different today – interestingly - on both sides of the divide. The international oil market is well balanced although the geopolitical situation and speculation is having an impact on prices, Saudi Oil Minister Ali Al-Naimi said Thursday. "Clearly, geopolitics and speculation about geopolitics is impacting prices," he told a meeting of Asian and Middle East energy ministers in Seoul. "Oil markets fundamentals are good. The market is well balanced and stocks remain within range," he said, adding that Saudi Arabia and other producers "remain willing and capable of meeting any additional demand."Al-Naimi also underlined that oil market stability has been improved by the availability of new output extracted from shale rock reserves. "We see new reserves (of shale gas) bring increased depth and stability for oil markets," he told the meeting.UAE Oil Minister Suhail Mohamed Al Mazrouei, also speaking at the meeting, said: "The emergence of shale oil and gas in the US has had a major impact on some countries, notably in West Africa that traditionally sold their crude to the US suddenly lost some of that market and have to respond by increasing their sales to new markets including Asia."The oil market is well-supplied, OPEC’s Secretary-General Abdalla El-Badri too said. There’s no need for action from the 12-member group even as Libya’s output has dropped because of worker strikes, he declared in Seoul.The OPEC Monthly Oil Report too stresses that the market remains well supplied.The US Energy Department too is expressing similar sentiments on supply, though underlining that unplanned outages from OPEC members had reached 2.1 million bpd in August, the highest level recorded since it started tracking outages in January 2009.Rising supply from Saudi Arabia has definitely helped offset losses from other OPEC members. OPEC output in August fell around 124,000 bpd on the month to 30.23 million bpd yet; Saudi Arabia pumped a record 10.19 million bpd in August, boosting output for the second time in two years to plug the gap, an industry source was quoted as saying by Reuters.And the IEA, the OECD energy watchdog, too is trumping the same tune. Global oil supplies look comfortable despite the massive outage in Libyan output and oil prices could see some downward pressure if sharp currency depreciation in emerging markets leads to softer demand , the International Energy Agency (IEA) said.The IEA stressed that the global oil supply was set to jump in the next months - thanks to a mix of seasonal, cyclical and political factors and notwithstanding the Libyan problems. “While the geopolitical storms in the Middle East and North Africa were yet to pass, easing fundamentals look set to lessen the pressure somewhat on market participants – at least for the next few months,” the IEA monthly oil report emphasized.And what makes the scenario starkly different from February 2011, is the fact that IEA today says, even if Libyan production remained disrupted for the rest of the year, the winding down of seasonal field maintenance in the North Sea and the US Gulf of Mexico shall bolster supply in the fourth quarter of 2013. “New North American production – including US light tight oil and Canadian synthetic crude – continues to surge. Saudi production is hovering near record highs, even as a seasonal dip in domestic air-conditioning demand looks set to free up more barrels for export,” the IEA added.Maria van der Hoeven, the IEA executive director, too is of the opinion that the market is well supplied, however, given an expected fall in demand over the rest of the year.And in comments to international press, Antoine Halff, head of the IEA’s oil markets division, also supported her view. “We have had some pressures in the market, but going forward we think the situation is easing as refineries go into maintenance,” Halff added. He also expected the industrialized countries to be able to replenish their stocks as demand falls. In its monthly report, the IEA said stocks could match or even exceed their five-year average by the end of the year, even if Libya fails to produce any oil between now and the end of the year.Despite odds, pundits are optimistic – all around. What a transition, indeed!Times have changed and so has the energy world. And the biggest reason for pundits to stay calm and not nervous despite the Libyan outage this time – is the unraveling shale revolution – changing the overall crude perspective.