The United States became a net oil exporter last week for the first time in 75 years, and even if it is likely to be for just one week, the achievement highlights the increasing global influence of the soaring U.S. crude oil production.
According to Bloomberg and data from the American Petroleum Institute, the United States had been a net oil importer since 1949.
In the week to November 30, however, the weekly U.S. net imports of crude oil and petroleum products were at minus 211,000 bpd—meaning that the U.S. was a net exporter of that amount, according to data from the EIA.
So far in 2018, the U.S. net oil imports have averaged around 2 million bpd, while the record net oil imports of 14.370 million bpd was set in November 2005.
In crude oil only, U.S. crude oil exports surged to a record high of 3.203 million bpd last week, as oil production also soars to record highs. According to weekly data from the EIA, U.S. crude oil production kept at a record 11.7 million bpd throughout November, although these numbers are likely to come off a bit in the monthly estimates. Production at 11.7 million bpd is more than what each of Russia and Saudi Arabia pumped in November, although the Saudis are also expected to have reached record highs in their production last month.
Saudi Arabia, as leader of OPEC, and Russia, its key partner in the production cut deal, are in the midst of deliberating new oil production cuts to rebalance an oversupplied market.
U.S. President Donald Trump continues to call on OPEC to keep oil prices low, because “The World does not want to see, or need, higher oil prices!”.
But a no-deal or an underwhelming agreement on Friday could send oil prices further down, potentially hurting production growth in the U.S. shale patch.
By Tsvetana Paraskova for Oilprice.com
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There are two cardinal figures which determine the level of US oil imports, namely US oil production and US consumption.
In 2017 US oil production and consumption averaged 9.355 million barrels a day (mbd) and 19.917 mbd necessitating imports of 10.562 mbd on average according to the authoritative 2018 OPEC Statistical Bulletin.
In 2018 consumption is estimated at 20.116 mbd and production is claimed to be 11.7 mbd thus necessitating imports of 8.416 mbd.
No matter how you try to manipulate US oil fundamental, the glaring fact remains, namely the US will never become self-sufficient in oil even for one minute well into the future.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Of course, as production increases the volumetric decline from existing wells increases, and as the percentage of total C+C production coming from tight/shale sources increases, the underling rate of decline from existing wells also increases.
In my opinion, a plausible estimate is that at current production levels the US needs to put on line about 2.5 million bpd of new C+C production every year, just to maintain current production. Or, in round numbers, the US needs to replace the roughly current production of Saudi Arabia about every four years, i.e., we need to put on line the productive equivalent of Saudi Arabia three times over between now and 2030, in order to maintain current US production.
And of course, a very high percentage of US C+C production consist of very light crude and condensate.
Based on September, 2018 EIA data, about 42% of US Lower 48 C+C production exceeded the maximum API gravity for WTI crude oil, 42 degrees API. Globally, in my opinion an effective peak (an "Undulating plateau") in actual global crude oil production (45 API gravity and lower) has been obscured by the continued increase in natural gas production and associated liquids--condensate and natural gas liquids.
And in regard to export and import data, based on the most recent four week running average EIA weekly data, US refineries were still dependent on net crude oil imports for 30% of the C+C inputs into US refineries, as more and more major net oil exporters quickly approach or have already hit zero net oil exports, e.g., Mexico and Denmark respectively--and as the Chindia region continues to consume an increasing percentage of Global Net Exports of oil (GNE, the combined net exports from the 2005 major net oil exporters).
From 2005 to 2017, I estimate that the volume of GNE available to importers other than China & India, what I call Available Net Exports (ANE), fell from 40 million bpd to 32 million bpd (total petroleum liquids, BP + EIA data). And given an ongoing--and inevitable--decline in GNE, it's a mathematical certainty that unless the Chindia region cuts their net imports of oil at the same rate as, or at a faster rate than the rate of decline in GNE, the rate of decline in ANE will exceed the rate of decline in GNE and the rate of decline in ANE will accelerate with time.
In fact, that is what we saw from 2005 to 2017, as ANE fell at about 2%/year from 2005 to 2017, versus basically flat GNE.
2. In order to become independent, the USA would need to retool refineries to run on the available domestic oil and add to the transport capabilities. The USA produces more energy than it is using but it is economic to export and import to get the best economics.