PIRA, a leading consultancy in worldwide energy market analysis, recently announced that the US has finally surpassed Saudi Arabia as the largest oil producer in the world, after an explosion in the use of hydraulic fracking created the largest oil boom in nearly 40 years, only beaten by the production boom in Saudi Arabia between 1970 and 1974.
The US remains the largest consumer of crude oil and liquid fuels in the world, but the plethora of cheap oil being produced domestically, of which total output has grown by 3.2 million barrels a day since 2009, has actually allowed it to begin exporting gasoline and other distilled fuels.
PIRA remarked that the US “growth rate is greater than the sum of the growth of the next nine fastest growing countries combined and has covered most of the world’s net demand growth over the past two years.”
The constant development of the shale industry, and the vast resources buried in shale formations, mean that “the US position as the largest oil supplier in the world looks to be secure for many years.”
PIRA said that the US total liquids production, including crude oil, condensate, natural gas liquids, and biofuels, will average about 12.1 million barrels a day this year, more than the previous top producer, Saudi Arabia.
Expansions in giant shale formations such as the Eagle Ford in Texas and the Bakken in North Dakota, have boosted US production output by 1 million barrels a day in 2012, and again in 2013. Saudi Arabia also managed to boost its output, but not quite to the same extent.
PIRA also pointed out that whilst total liquids production is the highest in the world, the US still produces around 3 million fewer barrels of crude oil each day than Russia or Saudi Arabia.
This piece is cross-posted from OilPrice.com with permission.