U.S. Oil Projected to Eclipse Russia and Saudi Arabia Combined by 2025
Wednesday, January 30, 2019
Marking a major shift in global crude oil production, the United States is projected to produce more oil and hydrocarbon liquids than Russia and Saudi Arabia combined by 2025, according to a new report from the independent research firm Rystad Energy.
In Rystad Energy's base case oil price scenario, U.S. liquids production is forecast to surpass 24 million barrels per day over the next six years, outpacing the combined output from both Russia and Saudi Arabia.
"The United States, having regained its position as the world's top liquids producer in 2014, is poised to accelerate into a league of its own over the next six years and eclipse the collective output of its two closest rivals by 2025," Rystad Energy partner Artem Abramov said in a statement.
Hydrocarbon liquids include a light form of crude oil know condensate and natural gas liquids such as ethane, propane, butane and ethane.
The United States, Russia and Saudi Arabia have consistently traded places among the top liquids producers in the world but Rystad Energy reported that market-driven oil and natural gas development in the Permian Basin of West Texas and other shale plays has given American producers significant momentum.
"The US has not seen its liquids market share exceed 50% among the "Big Three" producing nations since 1970," Rystad's report stated.
Demand for natural gas liquids continues to grow globally for use in plastics and other materials. But despite the positive projections, Abramov reported that there are some potential headwinds.
"U.S. growth potential could be slowed if oil prices slide below our base case for extended periods but, as long as average prices stay above $50, positive U.S. production tendencies will persist," Abramov added.