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US becomes world’s leading oil producer: Expanded oil production changes global industry dynamic
For a long time the US has been a leading oil player, but the combined might of OPEC was sufficient to reduce the global influence the country could have. However, thawing relations between Russia and Saudi Arabia reveal a decline in the ability of Gulf oil states to shape the international oil price according to domestic wants. Under such circumstances, expanding US production over much of the last decade has gone up against comparatively steady production from both Russia and Saudi Arabia.
The US Energy Information Administration (EIA) predicts the country will remain the leading oil producing nation at least until the end of 2019. Odds are the US will keep the top spot for some time to come. Even though forecasts for future production have been lowered from previous estimates, the US oil industry is still expected to grow which is more than can be said for many significant producers around the world. Given the United States will control much of the expansion in capacity over the next few years, the impact the government and US based oil majors can have on the international market is likely to carry on getting bigger.
A leading factor behind the rise of the United States to become the world leading oil producing state is the ability to drill at ultra-deepwater and deepwater depths whilst incurring expenses somewhat less than drilling at extreme depth once required. Reduced production costs means the Gulf of Mexico (GoM) has a long-term future as a major oil producing region despite oil prices still being somewhat lower than the 2014 peak.