Fundamentals 2A: U.S Oil Production and Global Ranking

Introduction

Crude oil production landscape has significantly changed over the years-motivated by a host of factors and ranging from resource availability to cutting-edge technological breakthroughs. This shift in production landscape has steered some countries into securing energy independence and global influence (simply by climbing up the producer rankings), while others have fallen off the ladder – becoming footnotes on the global stage!


No doubt, global production (crude oil & condensate) in the last three decades has largely been dominated by five countries: Saudi Arabia, Russia, United States (U.S), Canada and Iraq (fig 1). Saudi Arabia and Russia maintained steady growths in the past two decades, with Russia being the larger producer in recent years. The U.S for a long time was on a production decline (reaching its lowest level in 2008) up until the start of the topical shale revolution in the late 2000’s. Since then its production levels have continued to rise.

Fig 1: Top 5 producing countries from 1980 to 2018
Source: U.S Energy Information Administration, 2019

Iraq’s production has been growing since 2005 although after being heavily disrupted by wars and conflicts, especially in the early 1900’s and early 2000’s; and Canada’s production has been on a steady increase since 1980.

The U.S beat Russia & Saudi Arabia to become the largest crude oil producer in 2018, accounting for 13.2% of world production. The last time the U.S capped Russia was in 1999, and Saudi Arabia in 1990. The EIA, while attributing this to the use of more cost-effective drilling technology, also expects the U.S to continue to lead the ranking for at least through 2019.

Where is U.S Crude Produced From

Led by the recent shale boom, the U.S oil production more than doubled over the past decade, rising to a record level of 10.96 MM b/d (million barrels per day) in 2018. Much of the recent growth has occurred in the Permian basin located in western Texas and southeastern New Mexico. Other areas include the Eagle Ford basin, the federal offshore gulf of Mexico, and the Bakken formation which underlies parts of North Dakota and Montana. The top five producing states are highlighted as shown (Fig 2) but does not include the offshore gulf of Mexico which would have been ranked #2 if it were a state.

Fig 2: Top crude oil producing states in the U.S Source:
U.S Energy Information Administration, 2019


Reference

EIA: “Oil: Crude and Petroleum products explained”, September 24, 2019, https://www.eia.gov/energyexplained/oil-and-petroleum-products/where-our-oil-comes-from.php

EIA: “The United States is now the largest global crude oil producer”, September 12, 2018, https://www.eia.gov/todayinenergy/detail.php?id=37053

Visual Capitalist: “The largest Producers of crude oil?”, May 29, 2019, https:/www.visualcapitalist.com/the-largest-producers-of-crude-oil-1965-2017/

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