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The U.S. Becomes the World’s Largest Oil and Natural Gas Producer

Russia and Saudia Arabia are the next big oil sources.

DES MOINES, Iowa -- The U.S. is now the largest oil and natural gas producer in the world.

On Tuesday, the Energy Information Administration announced that U.S. petroleum and natural gas production increased by 16% and by 12%, respectively, in 2018, and these totals combined established a new production record.

It’s important to note that petroleum includes crude oil, condensate, and natural gas plant liquids (NGPLS).

In 2011, the U.S. passed up Russia to become the world’s largest producer of natural gas. Last year, the U.S. outproduced Saudi Arabia to become the world’s largest producer of petroleum, EIA reported.

Last year’s increase in the U.S. was one of the largest absolute petroleum and natural gas production increases from a single country in history, according to the EIA press release.

While the U.S. and Russia petroleum and natural gas production is nearly evenly split, Saudi Arabia’s production is weighted toward petroleum.

The U.S. 2018 petroleum output totaled 28.7 quadrillion British thermal units (quads), composed of 80% crude oil and condensate and 20% NGPLs.

Crude Oil

U.S. crude oil production increased by 17% in 2018, setting a new record of nearly 11.0 million barrels per day (b/d), equivalent to 22.8 quadrillion British thermal units (Btu) in energy terms, the EIA stated Tuesday.

Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth in U.S. crude oil production, according to EIA statistics.

NGPLs

The U.S. also produced 4.3 million b/d of NGPLs in 2018, equivalent to 5.8 quadrillion Btu. U.S. NGPL production has more than doubled since 2008, when the market for NGPLs began to expand, the EIA stated in Tuesday’s press release.

Natural Gas

U.S. dry natural gas production increased by 12% in 2018 to 28.5 billion cubic feet per day (Bcf/d), or 31.5 quadrillion Btu, reaching a new record high for the second year in a row, according to the EIA statement.

“Ongoing growth in liquefied natural gas export capacity and the expanded ability to reach new markets have supported increases in U.S. natural gas production,” EIA officials stated.

Russian Exports

Russia’s crude oil and natural gas production also reached record levels in 2018, propped up by stronger global demand. Russia exports most of its crude oil to European countries and to China.

Since 2016, nearly 60% of Russia’s crude oil exports have gone to European member countries in the Organization for Economic Cooperation and Development (OECD). Russia’s crude oil is also an important source of supply to China and neighboring countries, according to the EI press release.

Russia’s natural gas production increased by 7% in 2018, which exceeded the growth in exports.

OPEC Cuts Hit Saudi Oil

Saudi Arabia’s annual average crude oil production increased slightly in 2018, but it remained lower than in 2016, when Saudi Arabia’s crude oil output reached a record high, the EIA reported Tuesday.

“Saudi Arabia’s crude oil production reached an all-time monthly high in November 2018 before the December 2018 agreement by the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts,” according to the EIA statement.

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