Not that long ago, I'm sure you remember, the Organization of Petroleum Exporting Countries, better known as OPEC, controlled the international price of crude oil.
Given its effective control over more than 40% of all oil produced daily worldwide, how much (or little) the cartel decided to move into the market was the single biggest factor in setting the worldwide price.
In fact, in 1973, in the wake of the Yom Kippur War between Israel and the Arab coalition, OPEC was able to bring the West virtually to its knees, enacting an oil embargo by way of punishing major Western powers for their support of Israel in the conflict.
Of course, in those days, the United States was dependent upon foreign producers for almost 70% of the oil the country needed daily.
It had become both an economic and a national security concern, and "energy independence" was the preoccupation of American presidents going back to Richard Nixon. More than 60% of all domestic production was coming from stripper wells – wells producing fewer than 10 barrels a day each.
But then the combination of hydraulic fracturing and horizontal drilling ushered in a genuine "American energy revolution" in oil production.
The opening of shale (along with the broader tight) oil and natural gas production revolutionized the industry. Over the past decade, something truly unusual developed.
American domestic oil production became the balance for global supply and demand.
From barely 4 million barrels a day in 2008, extractions in the United States have now reached a record 11 million barrels, with some estimates expecting a rise to 12 million by 2020.
That would catapult domestic production into the number one position worldwide.
Then, as part of a budget agreement in mid-December 2015, Congress ended a more than four-decade prohibition on exporting U.S. crude to international markets. Just as the shale revolution was gaining steam, the added volume started moving out to higher-priced foreign markets.
American oil production has become the fulcrum on which international oil trade operates.