United States overtook Saudi Arabia and Russia to become the largest oil producer of the world for a brief period for the first time in history earlier this year because of a boom in shale production.
According to the International Energy Agency, the total increase in volume of exports of oil from the United States was more than 3 million barrels per day in June which took the total export of oil to almost 9 million barrels per day.
In the meantime, there was a cut back in exports of crude and other energy products by Saudi Arabia as a part of its pledge of controlling oil availability in the market in line with OPEC’s long term strategy to keep the global oil prices buoyant. On the other hand, problems with a pipeline that delivers oil to central and eastern Europe also restricted oil exports from Russia.
The achievement of being the number one oil producer in the world for a brief period has indicates the growing clout of the United States in the global energy industry even though the top position was reclaimed back by Saudi Arabia in July and August.
Over the past decade, the US production has more than doubled primarily because of increased shale production. Huge swaths of new resources have been opened up by drilling innovations which has allowed the United States to produce more oil than any other country in the world.
“With production expanding strongly, the question is can sellers of US crude price exports attractively enough to capture international markets,” the Paris-based IEA said in a report.
Hurricanes and the Trump administration’s trade war with China had limited the US exports in the months of July and August, said the IEA, which monitors energy supplies for the world’s richest nations. However it said that the challenge for the top spot would again be presented by the United States.
“The installation of the necessary pipelines and terminals is continuing apace, which will ensure that the trend continues,” the agency said in its report.
Increasing concerns about a slump in demand for energy because of the trade war and a global economic slowdown has forced down the global oil prices.
Its outlook for oil consumption was brought down last Tuesday by the US Energy Information Administration because of issues about the growth of the US economy. It now expects that the demand for growth this year will be the lowest since at least 2011.
The IEA maintained its estimates for global demand growth on Thursday, saying it expects an increase of 1.1 million barrels per day in 2019 and 1.3 million barrels per day next year.
(Adapted from CNN.com)