U.S. Shale Oil Boom Reshapes Global Energy Paradigm
December 15, 2019
Written By Adam Buckallew
U.S. crude oil production hit new heights in October with output of more than 11.5 million barrels per day according to the latest data released from the U.S. Energy Information Administration (EIA) on Dec. 31.
The United States has become the world’s new crude oil kingpin, surpassing Russia and Saudi Arabia. It’s the first time America has held the distinction as the top oil producer since 1973.
Domestic crude output has more than doubled since 2011. Thanks to fracking, horizontal drilling and other technological advances in crude oil production, vast quantities of untapped shale oil buried within the Permian Basin, which spans western Texas and eastern New Mexico, and the Bakken region in North Dakota and Montana have been unlocked.
Oil produced from shale is generally cheaper to obtain than crude procured from conventional drilling rigs. While the International Monetary Fund estimates Saudi Arabian producers needed $70 per barrel to break even on crude in 2018, the U.S. shale oil and gas industry requires an average of $50 per barrel to maintain profitability. That’s a primary reason why energy experts predict the boom in American oil production will continue to grow.
“The United States is set to put its stamp on global oil markets for the next five years,” Fatih Birol, executive director of the International Energy Agency, said last March. Birol’s agency predicts the United States will dominate global oil supply growth through 2023.
And don’t look for the United States to cede its newfound oil crown anytime soon. EIA expects U.S. crude oil production will continue to outpace Russia and Saudi Arabia through 2019.