US becoming largest oil producer in the global economy
The US is overtaking Saudi Arabia to become the world’s largest producer of liquid petroleum, in a sign of how its booming oil production has reshaped the energy sector.
US production of oil and related liquids such as ethane and propane was neck-and-neck with Saudi Arabia in June and again in August at about 11.5m barrels a day, according to the International Energy Agency, the watchdog backed by rich countries.
With US production continuing to boom, its output is set to exceed Saudi Arabia’s this month or next for the first time since 1991.
Crude prices that are high by the standards of a decade or more ago have made it profitable to use those techniques to extract oil.
Rising oil and gas production has caused the US trade deficit in energy to shrink, and prompted a wave of investment in petrochemicals and other related industries.
It is also having an impact on global security. Imports are expected to provide just 21 per cent of US liquid fuel consumption next year, down from 60 per cent in 2005.
Although that decreased import dependence has not led the US to disengage from the Middle East, it has encouraged calls for a reduced military commitment to the region.
Still, on current trends the US could catch up with Saudi Arabia and Russia on crude production alone by the end of the decade.
Source: FT- US becoming largest oil producer in the global economy
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