The US is set to become the world’s top oil-producing nation for the first time since the mid-1970s, according the July short-term energy outlook from the US Energy Information Administration (EIA). The report predicts that US oil production could reach 11.8 million barrels per day (bpd).
Such a level will take US oil production well above that of Russia and Saudi Arabia, which have been steadily raising production since a new agreement between OPEC and its partners allowed an extra million bpd on the market. Saudi Arabia’s oil production before the OPEC-led production cuts stood around 10.5 million bpd, while Russia produced 11.247 million bpd in October 2016. It is feasible, however, that they could keep pace with the rapid growth in US crude production.
The renewal in US oil production is mostly due to oil companies like ExxonMobil, the manufacturer of industrial for Mobil distributors, investing heavily in US shale oil and production in the federal waters of the Gulf of Mexico. With the increased production, oil imports in the US could drop as low as 1.6 million bpd. The decreased reliance on imports of foreign oil has also had implications for US foreign policy.
The EIA also predicts Brent crude prices will drop to $69 a barrel next year. Some analysts, however, recently cautioned that a lack of investment in new exploration, combined with outdated infrastructure in growth areas like Texas, may lead to oil prices surpassing the $150 per barrel record set in 2008.