NEW YORK (AFP) – Propelled by surging shale output, the United States is fighting for supremacy in the global oil market even as a pullback in crude prices threatens to challenge the boom.
The US, which only a few years ago seemed to be in the midst of an inexorable decline in domestic petroleum production, may have already overtaken other petroleum giants.
In terms of crude alone, the US pumped 8.8 million barrels a day in September, still a distance from Russia’s 10.6 million barrels and Saudi Arabia’s 9.7 million, according to official sources.
But when natural gas liquids are included, the US extracted 11.5 million barrels in August, essentially level with OPEC kingpin Saudi Arabia, according to data from the International Energy Agency.
Regardless of whether it is at or near the top of the global petroleum pecking order, the US is rethinking its decades-old ban on oil exports in light of the boom as energy emerges as an increasingly important foundation of the US economy.
At the same time, the US boom “has been changing the worldwide market,” said James Williams, energy economist for WTRG Economics. “It’s the thing that has put pressure on OPEC.”
The pace of growth has been staggering, with US output rising nearly 60 per cent since its low in 2008.
During previous booms, the US added one million barrels per day of output over the course of a decade.
“Today we’re growing supplies by one million barrels every year,” said Francisco Blanch, head of commodity research at Bank of America Merrill Lynch.
“This is by far the biggest and fastest expansion in US oil production in history.”
The boom in US oil output has sharply cut the amount of crude the US imports from leading petroleum producers, freeing up more oil for overseas markets and sometime pressuring prices.
In July, the US imported no oil from OPEC member Nigeria for the first time since 1973.
“There’s no reason for it now, because we have more light oil from the Bakken, Eagle Ford and the Permian Basin,” Williams said. “We have too much light oil.”
The boom has also spawned calls from oil industry players to ease the US embargo on crude exports, which has been in place since the 1970s oil shocks.