(EnergyAsia, September 23 2014, Tuesday) — The statement at the end of a hurriedly concluded energy summit of the world’s biggest economic bloc on September 2 was conspicuous by what was not mentioned: the growing threats to global oil supplies from the expanding conflicts in Iraq, Syria, Libya, Sudan and Nigeria, the emergence of the Islamic State (ISIS), the revival of the Cold War between Russia and the West, and Ebola’s impact on oil and gas production in West Africa just as global energy consumption is on course to hit another record high.

Instead, the “Beijing Declaration” issued by the energy ministers representing the 21-member Asia Pacific Economic Cooperation (APEC) group avoided all reference to reality by focusing on the evergreen feel-good topic of “Sustainable Energy Development in the Asia-Pacific Region”.

The group’s ability to breeze through an issues-free summit in one day amid the world’s worst geo-political challenges since the Second World War was made possible by the strange timing of oil prices plunging to a 15-month low. Much to the relief of the APEC energy ministers and their governments, Brent crude crashed below US$100 for the first time since mid-2013. To think it was just three months earlier when ISIS sensationally burst onto the Middle East that Societe Generale and other research firms were warning of the prospects of US$150 Brent crude as oil flows from Iraq, Syria and Libya came under threat.

Had those fears played out, the APEC ministers — whose member countries represent 60% of the world’s GDP including three of its largest oil consumers in the US, China and Japan — might have been dealing with economic collapse from the mother of all oil shocks.

But thanks to North America’s surging shale production in recent years, the global oil markets have been tamed, throwing an unexpected lifeline to Asia’s increasingly energy-deficit economies. By more than offsetting the occasional supply losses from the Middle East and Africa, North American oil and gas producers have enabled Asia to focus on the business of growing their economies.

According to the International Energy Agency’s (IEA) August forecast, global oil demand will grow by more than 1.1% to 92.7 million b/d this year and by a further 1.4% to 94 million b/d in 2015. Developing Asia, led by China and India, will drive the bulk of that growth, with its consumption expected to rise by nearly 3.5% from 22.53 million b/d in 2014 to 23.31 million b/d in 2015. That puts it just slightly less than North America’s consumption of over 24 million b/d.

If the APEC energy summit had a make-believe calm, it was based on Asia’s hope for oil and gas prices to remain stable in an oversupplied market. That faith will be sorely tested in the coming months as the world’s geopolitical conflicts are more likely to intensify and spread than die down.

“Peace has hardly broken out in the producing world. Between them, Iraq and Russia represent about 11 million b/day of exports,” Canadian bank CIBC observed in a recent weekly commentary.

At what point will the combined supply disruptions of oil and gas flows in the Middle East, Africa and Russia eventually overwhelm North America’s new production capacity?

For Asia, the answer to that troublesome question could come sooner rather than later. A little over a week after the APEC summit, US President Barack Obama raised the world’s geopolitical stakes with new sets of actions against both ISIS and Russia.

Bypassing the UN Security Council, he ordered the start of a new protracted war in the Middle East with air strikes in Syria and Iraq to stop ISIS’s advance, and tougher economic and additional trade sanctions against Russia to undermine its crucial oil and gas sector. The sanctions will affect Russia’s plans to develop its Arctic reserves as well as Siberian fields to supply China under their record US$400-billion gas agreement signed last May.

Obama’s strategy also calls for expanded military supplies to the Iraqi and Kurdish armies, and to “moderate” elements of the Syrian rebel militia fighting the regime of President Bashar Assad. Analysts have warned that Syrian rebel forces include ISIS members while the loyalty of the Iraqi military is suspect as many had fled or joined the radical Islamic group which swooped to conquer oil-producing parts of the country in June.

Obama’s “coalition” includes conservative Arab states like Saudi Arabia and Qatar, where the Sunni-supported ISIS has a strong following, but excludes Syria and Shia-based Iran which are highly motivated to fight the most radical Islamic terror group yet to emerge after Al Qaeda. The plot is becoming more convoluted, and will likely magnify the impact of the region’s numerous conflicts.

As its oil-addiction grows amid the collapse of crude prices, Asia is increasingly at risk of becoming the biggest collateral damage if the US fails to maintain its shale revolution.

“By 2030 China’s energy consumption will be the centre of gravity for global energy demand. India and China will cement their positions as compelling destinations for exporters of coal, oil and gas,” said Wood Mackenzie’s analyst Paul McConnell.

But the experts at the APEC summit will have taken greater comfort from the UK consultant’s prediction of an “energy independent” North America becoming a net oil and gas exporter by 2018.

That momentum will continue through 2030, according to McConnell, enabling North American’s oil production to surge to 1,040 million tonnes from 650 million toe in 2009 while its natural gas output will double to 1,000 million tonnes of oil equivalent since the start of the shale revolution in 2005.

“By 2018 North America will also have overtaken the gas output of Russia and the Caspian, and will grow to be the world’s largest gas producing region by 2030,” he said.