This month U S oil production exceeded any other country in the world, yes … including Saudi Arabia and Russia. The US now produces 10 million barrels a day and could hit a high of 11 million a day by the end of the year. This major change of events is due to US use of high technology to continually improve shale oil production, commonly called fracking. Where as many OPEC countries and Russia have cut back production to help raise the price of oil, the US has taken advantage of this gap to quickly add fracking drill rigs. The boom times are back for US shale oil, but this time the shale oil producers are cautiously watching their financials, to the delight of investors.
The US is slowly becoming a self-sufficient oil consumer, and over the next several years become a “net oil exporter” There are an estimated 7,000 additional shale wells that have been drilled but not completed, a tremendous backlog.
So what is the next step for US oil and natural gas …. major exports! Just recently the first supertanker pulled up to a Louisiana offshore oil port and did a test loading of oil. Once the process is tested and approved the US could export massive amounts of oil on these supertankers to lucrative overseas markets. These supertankers can carry 2 million barrels of oil and the Louisiana “LOOP” is the only deep-water port that can currently handle these huge vessels.
The US government lifted the ban on oil exports in 2015 and the gulf coast has responded with an increase in oil exporting. However, the use of supertankers takes this to a whole new level. In 2017 exports reached a high of 2 million barrels a day. China is the 2nd largest buyer of US oil after Canada.
How far is the US from being 100% self-sufficient? Pretty close, currently the US is a “net importer” of oil at about 3.5 million barrels a day, that gap will close shortly.
Does this mean oil and gasoline will get cheaper for those of us in the US? No, probably not. The rest of the world set’s the price of oil and US providers have no incentive to discount the price of oil here at home when they can export it at a higher price. The good news is that at least the US is no longer being held hostage to OPEC for our sources of energy.