The United States has “likely surpassed” Russia to become the world’s largest oil producer, the U.S. Energy Information Administration said on Wednesday.
Based on preliminary estimates, America — which earlier in the year surpassed Saudi Arabia — is now the top producer, marking the first time since 1973 that the U.S. has led the world in output. The landmark also beats a prediction that the U.S. would not achieve the goal until 2019.
“Fracking,” shorthand for “hydraulic fracturing”, has driven the boom in the Permian Basin under Texas and New Mexico, the Associated Press reports. When gas prices topped $4 during the Obama administration, many producers turned to fracking and output soared.
“The U.S. energy agency estimated that the United States produced an average of 10.9 million barrels a day in August, compared with about 10.8 million barrels a day by Russia and around 10.4 million from Saudi Arabia. It said the U.S. passed Saudi Arabia in February for the first time in more than two decades, and this summer it topped Russia for the first time since 1999,” the AP said.
Both Russia and Saudi Arabia passed the U.S. in the 1970s when Americans suffered through the “gas crisis.” Few thought the U.S. would ever top the list again.
And production is expected to grow even further, OilPrice.com reports.
Conditions are ripe for a further increase in U.S. production. With sanctions against Iran due to enter into effect in November, oil prices will jump higher even though the market has had several months to adjust to the new situation with lower supply. The United States has ensured a cushion of 11 million barrels from the Strategic Petroleum Reserve, and OPEC and Russia have promised they would pump more if it is needed.
The Gulf of Mexico and Texas will continue to lead the way in U.S. production, with Texas—and more specifically the Permian—shining particularly bright. EIA’s latest drilling productivity reportsaid production in the Permian averaged 3.387 million bpd in August, and is set to rise to 3.42 million bpd this month. All in all, the shale patch contributed 7.43 million bpd to the national total in August and will contribute 7.522 million bpd to the total in September.