The U.S. surpassed Russia in August to claim the title of world’s top oil producer, with the largest year-on-year output increase in its history.
Output rose to a record 11.346 million barrels a day, according to a monthly report issued Wednesday by the U.S. Energy Information Administration. Russia pumped 11.21 million in August, according to its energy ministry.
U.S. supply surged by 2.1 million barrels from August 2017, the largest recorded increase in data going back to 1920, according to EIA. Oil companies boosted shale drilling in Texas, Colorado and other states in response to a 48 percent rally in prices. U.S. Gulf of Mexico production hit a record high, as did New Mexico, which has benefited from massive growth in the Permian Basin.
The reign as world’s biggest oil producer may be short-lived: Russia in September produced 11.37 million barrels a day and they may be above 11.4 million in October. Saudi Arabia and Russia pledged to pump more oil to offset declines in Venezuela and plug any supply shortfalls from U.S. sanctions on Iran.
While U.S. drillers may take their foot off the gas a bit until new pipelines from the Permian Basin come on in 2019 and 2020, production is still heading higher. Consultant Rystad AS estimates that even at $55 a barrel, the nation’s output may reach 16.5 million barrels a day by 2030.
The supply surge is increasingly finding a home overseas, as U.S. refiners reach the maximum they can handle of the light, low-sulfur oil coming from shale plays. Net crude and refined fuel imports sank to a record low 1.2 million barrels a day last week, and may fall to zero as soon as next year, according to analysts at Citigroup.
Oil capped its worst month in more than two years, falling 1.3 percent in New York Wednesday to $65.31 a barrel.