US to be crowned oil king of the world

The US is poised to supplant Russia and Saudi Arabia as the world’s biggest oil producer, ushering in a new era of energy production.

Analysis by research firm Rystad Energy has found surging shale oil output could ramp up US crude production by 10% this year, bringing the country’s total oil output to almost 11 million barrels per day.

That would lift it above both its major energy rivals for the first time since 1975. It is all “a far cry from the days when US production was on what was thought to be an irreversible downward path”, says The Washington Post.

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The fracking revolution driven by President Obama has turned America into an “energy powerhouse”, and this long-term shift “has allowed the US to be less reliant on foreign oil, including from the turbulent Middle East” and Venezuela, says CNN Money.

Since Obama came to power, oil imports have dropped by 25%. Exports have tripled since a 40-year ban on shipping crude overseas was lifted in 2015, something Rystad’s Martin Wiggen says “is a fantastic development in terms of security”.

Donald Trump’s pledge to usher in an era of “American energy dominance” by cutting red tape and environmental regulations, approving the Keystone XL pipeline and loosening offshore drilling regulations has boosted optimism even further.

Meanwhile, the US has largely managed to ride out the sharp fall in the price of oil over the past three years after Opec, led by Saudi Arabia, launched a price war in 2015.

CNBC says US shale drillers, who use advanced drilling methods to unlock oil and gas from rock formations, “have frustrated efforts by major oil producing nations to reduce brimming global crude stockpiles and boost prices”.

As Opec’s leverage over the world’s biggest economy diminishes, it is hard to know how oil producers will react and, more importantly, whether this represents merely a blip or a return to the global energy landscape that existed before the Arab oil crisis of the 1970s.