The Energy Information Administration stated this week that the US produced more than 11.3mn barrels a day in August, making it a 4% increase over the old record set in July. Russia’s energy ministry on the other hand, estimated that it pumped 11.2mn barrels a day in the same month. OPEC also estimated Saudi Arabia’s output to be 10.4mn barrels a day.
This marked the first time since 1973 that the US led the world in oil production.
Several states in the country hit record production in August— including Texas, which accounts for about 40% of US crude overall . The energy agency said that pipeline bottlenecks in Texas and New Mexico are causing more use of trucks and rail cars to haul oil.
In terms of supply, the US surged by 2.1mn barrels from August 2017, the largest recorded increase in data going back to 1920, according to EIA. Oil companies boosted shale drilling in Texas, Colorado and other states in response to a 48% rally in prices. The US Gulf of Mexico production also hit a record high, as did New Mexico, which has benefited from massive growth in the Permian Basin.
This reign as the world’s biggest oil producer may be short- lived, though. Russia is expected to go above 11.4mn barrels per month in October. Also, Saudi Arabia and Russia both have pledged to pump more oil to offset declines in Venezuela and plug any supply shortfalls from US sanctions on Iran.
While US drillers may take their foot off the gas a bit until new pipelines from the Permian Basin come on in 2019 and 2020, production is still managing to surge. It is estimated that by 2030, the nation’s output may reach 16.5mn barrels a day—even with the price of $55 a barrel.
Net crude and refined fuel imports sank to a record low 1.2mn barrels a day last week, and may fall to zero as soon as next year, according to analysts at Citigroup.
Overall, oil capped its worst month in more than two years, falling 1.3% in New York Wednesday to $65.31 a barrel.