Jason Bordoff

They consider themselves the sort of central bank or federal reserve of the global oil market.

But by the way, that Saudi Arabian spare capacity can only get to market if you can put it on a tanker and send it through the Strait of Hormuz.

So it's not so helpful right now.

Other people who have the potential to increase production, and the United States is one of those now with the shale revolution, shale supply is able to be produced a bit more quickly than more conventional oil.

But you're talking about six months, 12 months.

It's not something that happens in a crisis.

We're still part of an interconnected market, so we still feel higher oil prices, but it is hard to overstate how dramatic the transformation in the U.S.

energy position has been in just the last 10 to 15 years.

20 years ago, the U.S.

was producing about 5 million barrels a day and importing 60% of its oil.

We'd been since the Arab oil embargo.

Year after year, we had presidents, George Bush and his State of the Union, warn that America was addicted to oil.

And high oil prices were bad for the United States, and we needed to get off of Middle Eastern oil.

And within just a couple of years, oil producers figured out new technology, what's known as hydraulic fracturing.

You could fracture rock and you could extract oil and gas from the geology in ways we didn't quite know was possible or economic before.

And it started with natural gas and then it extended to oil and it just really has taken off this extraordinary increase in U.S.

production.

But that's starting to peter out now.

The growth is not happening in the same way it used to.

And so these big oil companies were already saying, where's the next increase in production going to come from?