US to overtake Saudi Arabia as No. 2 oil producer
The International Energy Agency (IEA) says the United States would overtake Saudi Arabia as the world's number two oil producer after Russia this year by relying on its massive shale oil production.
"This year promises to be a record-setting one for the US," the IEA wrote in its monthly market report as reported by media.
The IEA added in its report that the US had already been able to achieve the highest record of oil production over the past 50 years by producing 9.9 million barrels per day of oil. This, it added, had put the US neck-and-neck with Saudi Arabia, the world's second largest crude producer after Russia.
"Relentless growth should see the US hit historic highs above 10 million barrels per day, overtaking Saudi Arabia and rivaling Russia during the course of 2018 – provided OPEC/non-OPEC restraints remain in place," it said in its report as reported by AFP.
In early 2016, oil prices plunged to as low as $30 per barrel in what many believed had been caused as a result of America’s shale oil production activities.
This provoked producing nations - both inside and outside the OPEC oil cartel – to reach a deal at the end of 2016 to cut back production and drive prices higher.
Geopolitical tensions and a reduction in oil stocks have also contributed to the recovery.
Crude recently rose above $70 per barrel for the first time since 2014 after OPEC and non-OPEC countries agreed to extend their combined cutbacks until the end of this year.
Rising prices have, in turn, made it more attractive for shale companies to increase drilling, AFP added in its report.
And since the United States is not a party to the deal, its shale production can continue uninhibited.
"US growth in 2017 beat all expectations ... as the shale industry bounced back, profiting from cost cuts, (and) stepped up drilling activity," the IEA said.
"Explosive growth in the US and substantial gains in Canada and Brazil will far outweigh potentially steep declines in Venezuela and Mexico," it said.
"The big 2018 supply story is unfolding fast in the Americas," the IEA said.
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