The United States is poised to ramp up crude oil production by 10% in 2018 to about 11 million barrels per day, research firm Rystad Energy has said, which would make the U.S. the world’s largest producer.
The expected surge in shale oil output “should allow the United States to dethrone Russia and Saudi Arabia as the planet’s leading crude oil producer,” Rystad predicted as reported by CNN.
The U.S. hasn’t been the global leader in oil production, nor ahead of both Russia and Saudi Arabia, since 1975, according to the report.
Shale producers in the United States have been smothered by cheap prices since a significant fall in oil’s price in 2014. But prices have since rebounded, with crude climbing above $61 a barrel on Wednesday for the first time in 2-1/2 years.
“The oil rebound has been caused by solid demand and the whittling down of the epic supply glut that caused prices to crash in the first place,” writes Matt Egan in CNN. “U.S. oil production slipped — but didn’t completely collapse — after Saudi-led OPEC launched a price war in late 2015 aimed at reclaiming market share lost to shale and other players. A massive supply glut caused crude to crash from around $100 a barrel to a low of $26.”
“But the resilient oil industry, led by the shale hotbed of the Permian Basin of Western Texas, rebounded nicely last year. The comeback was driven by higher crude prices as well as new technology that makes it cheaper and easier to frack, Egan writes.”
The United States lifted a 40-year ban on exporting oil in 2016.