October 25-2013
The United States has now become the world’s largest producer of oil, according to PIRA Energy Group, a New York-based energy markets consulting firm.
US total supply for 2013 is expected to average 12.1 million barrels a day.
In 2012, the US overtook Russia to become the second largest supplier of oil and was just behind Saudi Arabia. Both the US and Saudi Arabia increased their supply in 2013, but production in the US grew at a faster pace. US total supply in 2013 is larger than that of Saudi Arabia by 0.3 million barrels a day and ahead of Russia by 1.6 million.
Iran has now fallen to seventh place, PIRA said.
The fourth through 10th largest suppliers are: China, Canada, UAE, Iran, Iraq, Kuwait and Mexico.
The term “total oil supply” counts all forms of liquids. The largest part is crude oil, including condensates. In this category, the US is expected to produce 7.4 million barrels a day this year, which is less than that produced in Saudi Arabia and Russia by roughly 3 million each.
But the US has substantial other forms of supply, including natural gas liquids (NGLs) at 2.5 million barrels a day, biofuels at 1.0 million, and “refinery gain” at almost 1.3 million. (Refinery gain measures the ability of a refinery to optimize its output through sophisticated high conversion capabilities.)
The US has surged to be the world’s lead oil supplier primarily because of the growth in shale oil. Shale crude and condensate production at 2.5 million barrels a day in 2013 is now slightly over one-third of total US crude production, and shale NGL at 1.2 million barrels is almost half of total NGLs.
The US shale liquids growth of 3.2 million barrels a day over the last four years has been nearly unparalleled in the history of world oil; only Saudi Arabia in 1970-74 raised its production faster. The US growth in the last four years exceeds Iran’s total crude production, which is now 2.7 million barrels a day.
The US position as the largest oil supplier in the world looks to be secure for many years. Although growth rates of US shale liquids are expected to slow in the future, PIRA’s forecast sees the US increasing the lead over the next two largest countries until after 2020 and retaining the lead at least through 2030.