News / USA

US Soon to Overtake Russia as Top Oil Producer

Pump jacks are seen in the Midway Sunset oilfield, California, April 29, 2013.
Pump jacks are seen in the Midway Sunset oilfield, California, April 29, 2013.
TEXT SIZE - +
Reuters
— The United States will become the world's largest oil producer next year - overtaking Russia - thanks to its shale oil boom which has transformed the global energy landscape, the West's energy watchdog said on Friday.

The prediction comes only days after estimates by the U.S. government showed the United States, the world's largest oil consumer, has ceded its ranking as top global oil importer to China, thanks to the shale revolution cutting import needs.

“The United States' place in the driver's seat of growth is also a throwback to decades past,” the International Energy Agency said in its monthly report.

The U.S. resurgence as an oil producer is already reshuffling the cards in the game of world energy diplomacy, playing it a new hand in relations with long-term ally and top OPEC producer Saudi Arabia.

Major producers such as Russia are now forced to invest billions of dollars into new pipelines towards Asia as they can no longer rely on demand from the West, and have to deal with increasingly assertive Beijing.

“With output of more than 10 million barrels per day for the last two quarters, its highest in decades, the nation is set to become the largest non-OPEC liquids producer by the second quarter of 2014, overtaking Russia. And that's not even counting biofuels and refinery gains,” the IEA said.

The agency, the Paris-based energy arm of the Organization for Economic Co-operation and Development (OECD) estimated that U.S. liquids production will average 11 million bpd in 2014 versus 10.86 million in Russia.

The spike in U.S. production will allow total non-OPEC supply to grow by an average of 1.7 million barrels per day in 2014, peaking at 1.9 million in the second quarter, the highest annual growth since the 1970s, the IEA said.

That robust growth will compensate for disruptions to Organization of the Petroleum Exporting Countries' production and provides a cushion for oil prices, which otherwise could have spiked much higher than the current $110 a barrel.

OPEC crude supplies slipped to below 30 million bpd for the first time in almost two years, led by steep drops in Libyan and Iraqi exports due to unrest and terminal repairs, and despite Saudi Arabian output topping 10 million bpd for a third month running.

The IEA said that growth in non-OPEC production was so strong that it further reduced its estimates for demand for OPEC crude next year by an average of 100,000 bpd to 29 million bpd - effectively 1 million bpd below current pumping levels.

European surprise

The IEA left its global oil demand growth forecast for 2014 broadly unchanged at 1.1 million bpd, an increase of 1.2 percent, saying the macroeconomic backdrop was improving.

“European demand data have surprised on the upside recently amid reports that the euro zone's recession ended in the second quarter of 2013 and signs of improvement in business confidence,” it said.

But it added that it saw significant downside risks due to the budget standoff in the United States and currency depreciation in many emerging market economies.

The IEA also said few observers expected sanctions on Iran's oil and finance sector to be eased anytime soon, despite a friendlier rhetoric from Tehran.

“Rather, most expect that turning the clock back on sanctions will be a drawn-out process based on tangible diplomatic progress with regard to the issues at hand, which many still view as a remote prospect,” it added.

The IEA estimated Iran's crude oil production had declined by 100,000 in September to 2.58 million bpd. Oil imports from Iran rebounded by 180,000 to 1.17 million thanks to higher purchases from China and India.

It said preliminary data indicated China lifted imports from Iran to a four-month high of 555,000 bpd, India increased them to 265,000 bpd, highest since January 2013, and Pakistan imported first oil from Iran since January 2011.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid