T. Boone Pickens tells us where oil is headed
Oil prices could rise $10 a barrel over the coming year because of ongoing supply disruptions around the world, T. Boone Pickens, CEO of BP Capital Management, told CNBC on Thursday.
"You now have 2.5 million barrels a day offline. That is high, and you have it from about five different sources," said Pickens, referring to curbs in oil-producing nations including Iraq, Libya, Sudan and Brazil. "Usually you get it from one source, so it's a little bit harder to get everybody back on."
Pickens questioned whether it makes sense for the U.S. to continue importing oil through the Strait of Hormuz—a route that connects the several landlocked oil-producing nations in the Middle East with the Gulf of Oman and the Arabian Sea.
Nearly 17 million barrels, or 20 percent of the world's traded oil, moves through the strait daily, but only 1.7 million barrels of that gets to the U.S., though it has one of the largest naval fleets protecting the waterway.
"So the Fifth Fleet is making all that safe to move out of there. Why? For China and Europe," Pickens said. "We're nuts to do it."
(Read more: Oil costs nudge September US import prices higher)
As domestic oil production continues to rise, it's possible for the U.S. to become oil independent, but "you don't want to do that," he said. "What you want to do is bring Canada and Mexico in to create a North American energy alliance, and now we don't need anything from anywhere."
Brent crude oil traded at about $107 a barrel and U.S. crude oil near $97 a barrel in Thursday's session.