New data from the US government shows that the US produced 10.038 million bpd (barrels per day) in November last year, exceeding the symbolic 10 million threshold for the first time since 1970.
Much of the growth in US production has been driven by shale oil, particularly in the prolific Permian Basin where operators like ExxonMobil – the oil major behind Mobil UK stockists – use hydraulic fracking techniques to access tight oil formations. While the shale revolution was originally driven by high oil prices, the industry has incrementally improved its techniques and can now pump oil at much lower break-even prices. Unlike the previous peak in 1970, which was followed by a gradual decline, US oil production is still on an upward trajectory.
According to IHS Markit Vice Chairman Dan Yergin, US oil production could exceed 12 million bpd by the end of 2019, which would likely make it the world’s largest oil producer. Yergin also said:
“Just a decade ago, our net imports were 60% of total demand. Now, they’re 20%.”
Some analysts also point out that a greater domestic oil production will have consequences for US foreign policy as well. With a much lower dependence on imported oil, the country will be more likely to take a firmer hand with problematic oil-producing countries. As an example, the prospect of a default in Venezuela will be far less daunting than it would have been in the past when the country relied mostly on oil imports.
