By Prune Perromat, AFP
NEW YORK–Propelled by surging shale output, the United States is fighting for supremacy in the global oil market even as a pullback in crude prices threatens to challenge the boom. The U.S., which only a few years ago seemed to be in the midst of an inexorable decline in domestic petroleum production, may have already overtaken other petroleum giants. In terms of crude alone, the U.S. pumped 8.8 million barrels a day in September, still a distance from Russia’s 10.6 million barrels and Saudi Arabia’s 9.7 million, according to official sources. But when natural gas liquids are included, the U.S. extracted 11.5 million barrels in August, essentially level with Organization of Petroleum Exporting Countries (OPEC) kingpin Saudi Arabia, according to data from the International Energy Agency. Regardless of whether it is at or near the top of the global petroleum pecking order, the U.S. is rethinking its decades-old ban on oil exports in light of the boom as energy emerges as an increasingly important foundation of the U.S. economy. The pace of growth has been staggering, with U.S. output rising nearly 60 percent since its low in 2008.
During previous booms, the U.S. added one million barrels per day of output over the course of a decade. Nigerian Oil Not Needed The boom in U.S. oil output has sharply cut the amount of crude the U.S. imports from leading petroleum producers, freeing up more oil for overseas markets and sometime pressuring prices.
In July, the U.S. imported no oil from OPEC member Nigeria for the first time since 1973. The boom has also spawned calls from oil industry players to ease the U.S. embargo on crude exports, which has been in place since the 1970s oil shocks.
Some manufacturers also endorse the move. A report Tuesday by the Aspen Institute said lifting the ban would boost durable goods production by some US$8 billion by 2017, in part due to greater sales of mining and construction equipment. Even as the crude exports ban remains in place, U.S. regulators have shown leniency in allowing more oil-based exports. Exports of diesel and other petroleum products have soared over the last five years. U.S. oil exports reached 420,000 barrels a day in early October, the highest level since 1957. These gains have come from shipments of minimally refined oil. Some companies are also building special refineries to permit such exports. Boom at Risk? The IEA has projected that U.S. oil production will continue to increase through 2020, but will level off soon thereafter.
However continued growth depends heavily on commodity prices and U.S. output could suffer disproportionately from a big retreat in prices. Surging U.S. production has been a major factor in the 20 percent decline in oil prices since June, even though political tensions have remained high through many parts of the oil-rich Middle East and North Africa region.