US replaces Saudis as top oil supplier

NEW YORK - Reuters

In this Monday, Sept. 23, 2013 photo, a pump jack works beside the site of new home construction, in Midland, Texas. AP photo

The United States has overtaken Saudi Arabia to become the world’s biggest oil producer as the jump in output from shale plays has led to the second biggest oil boom in history, according to leading U.S. energy consultancy PIRA.

U.S. output, which includes natural gas liquids and biofuels, has swelled 3.2 million barrels per day (bpd) since 2009, the fastest expansion in production over a four-year period since a surge in Saudi Arabia’s output from 1970-1974, PIRA said in a release on Oct. 15.

It was the latest milestone for the U.S. oil sector caused by the shale revolution, which has upended global oil trade. While still the largest consumer of fuel, the rise of cheap crude available to domestic refiners has turned the United States into a significant exporter of gasoline and distillate fuels.

China's largest importer

Last month, China surpassed the United States as the largest importer of crude, according to the U.S. government, as the rise of domestic output cuts the U.S. dependence on overseas oil. “(The U.S.) growth rate is greater than the sum of the growth of the next nine fastest growing countries combined and has covered most of the world’s net demand growth over the past two years,” PIRA Energy Group wrote.

“The U.S. position as the largest oil supplier in the world looks to be secure for many years,” it added. otal liquids produced by the United States, which PIRA defined broadly to include supplies such as crude oil, condensate, natural gas liquids and biofuels, should average 12.1 million bpd in 2013, pushing it ahead of last year’s No. 1 supplier, Saudi Arabia.

Output from the OPEC state also rose last year, but the gains lagged those from the United States, the consultancy said.

PIRA said the increase in oil from shale, which has been centered in areas such as Eagle Ford in Texas and the Bakken in North Dakota, has seen U.S. supply grow by 1 million bpd in 2012 and again 2013.

The United States still lagged both Saudi Arabia and Russia in production of just crude oil by abut 3 million bpd, PIRA noted. Rounding out the top 10 oil suppliers were China, Canada, UAE, Iran, Iraq, Kuwait, and Mexico.