US Oil Production Surpasses Saudi Arabia

By Marc Chandler, Global Head of Currency Strategy, Brown Brothers Harriman

This Great Graphic comes from Mark Perry’s Carp Diem blog, which I saw on the American Enterprise Institute website. It shows that last November, the US oil production surpassed Saudi Arabia for the first time in almost a decade.

Perry notes that the Energy Information Administration says that last year the Saudi Arabia’s was the largest producer and export of petroleum and other liquids. at 11.6 mln barrels per day. It estimated US output at 11 mln barrels per day., putting it in second place for the year.

Of course there is much fluctuation on a month to month basis and but this coupled with what we noted earlier (record US petroleum exports in December) is a sign of things to come. The financial crisis may or may not be a game changer in terms of of the global political economy, the cheap energy story in the US is a game changer and the full ramifications are still being contemplated.

Marc Chandler

Marc Chandler

Marc Chandler has been covering the global capital markets in one fashion or another for nearly 25 years, working at economic consulting firms and global investment banks. Chandler attended North Central College for undergraduate. He holds masters degrees from Northern Illinois University and University of Pittsburgh in American History and International Political Economy. Currently Chandler teaches at New York University Center for Global Affairss, where he is an associate professor.

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  • http://sbinzagr@gmail.com SMOB

    It’s a good thing, but I wounded how fast is the US power grid being transformed and when will US transportation shift over to Diesel from LNG? LNG state side facilities? As an investor with a long term view what is the impact of all of this?

  • Kyle

    That’s actually liquids production, which includes condensate and NGL production, not simply “oil” production. There’s lots of room for fudgyness here, the IEA and EIA outright admit this whenever they release this information. Just an FYI. And to the other guy, US power grid is rapidly transitioning to gas, as evidenced by coal-to-gas switching that happened en masse last year and by the continued closings of coal plants. Coal will always provide baseload generation, natural gas will continue its market share creep for peak-demand load generation so long as it is price competitive with coal (there’s no reason to put a dollar figure on this because its different depending on the power plant and the source gas).

  • Alberto

    So here we have the n-th ignorant writing about a topic he doesn’t know. I worked on energy for the last 10 years but I’m still an ignorant so I prefer listening from the world leading experts like this guy:

    “Tadeusz (Tad) Patzek is the Lois K. and Richard D. Folger Leadership Professor and Chairman of the Petroleum and Geosystems Engineering Department at The University of Texas at Austin. He also holds the Cockrell Regents Chair #11. Between 1990 and 2008, he was a Professor of Geoengineering at the University of California, Berkeley. Prior to joining Berkeley, he was a researcher at Shell Development, a research company managed for 20 years by M. King Hubbert of the Hubbert peaks. Patzek is a coauthor of some 200 papers and reports.”

    This is one of his posts on the argument. Then you can decide, stay with propagandists and dream sellers or scientists.

    http://patzek-lifeitself.blogspot.it/2012/11/peak-what-peak.html

    and another one which must be read:

    http://patzek-lifeitself.blogspot.it/2012/11/a-gobal-oil-peak-or-plateau.html

    I want to point out that people like Mr.Perry did not even read the Energy Information Administration (EIA) reports. This is a quote from EIA:

    “The United States consumed 18.8 million barrels per day (MMbd) of petroleum products during 2011, making us the world’s largest petroleum consumer. The United States was third in crude oil production at 5.7 MMbd. But crude oil alone does not constitute all U.S. petroleum supplies. Significant gains occur, because crude oil expands in the refining process, liquid fuel is captured in the processing of natural gas, and we have other sources of liquid fuel, including biofuels. These additional supplies totaled 4.6 MMbd in 2011.”

    Wake up men !

  • http://www.nowandfutures.com bart

    By his own admission, Dr. Perry is not interested in the full picture.
    “I’ve never suggested that the economic news here is balanced” (Jan 2013)

    “Peak cheap oil” is alive and well, even per the EIA

    http://www.nowandfutures.com/download/d4/tight_oil_shale_oil_peak2019_1990-2040(eia).png

  • Explorer

    Compare the revenue from oil earned by Saudi Arabia and the amount spent on imports by the US. Look at the difference in the trade positions.

    Now also consider the export land model whereby as exporters develop they use more oil and export less putting increased pressure on importers, even those that produce some of their requirement.

    Then consider the cost per barrel of the increased production in the US compared to the average cost per barrel.

    Finally, consider how many days usage the increased US production represents assuming no other sources.

    The US still needs to consider 50 years resource security and what transitions it needs to make.

    Oil is required for fertiliser, plastics and other chemical industry products and is likely to be critical for heavy transport. Where is the long term strategy?

  • http://whatbadgerseat@msn.com Economic-Geologist

    Title should say US Petroleum production surpasses Saudi Arabia, not OIL production.

    Oil is one type of Petroluem. The NGLs, condesate and associated liquids is result of increased wet gas production, not increased oil production.

    Cullen, Marc Chandler and Mark Perry, all look stupid claiming this.