Despite oil production curtailments earlier this year that are not fully back online, the United States maintained its global status as the leading supplier of crude oil in July, ahead of Russia and Saudi Arabia.
According to data from the Joint Organisations Data Initiative (JODI) database, which collects self-reported figures from 114 countries, U.S. crude oil production rose in July back up to above 11 million barrels per day (bpd). At 11.035 million bpd, American crude oil output was 5.7 percent higher than the June production of 10.436 million bpd. Production in June had also increased month over month after the May figure of 10 million bpd—the lowest U.S. monthly production since late 2017.
U.S. exports of crude oil also rose in July compared to June. The United States exported 2.867 million bpd in July, up from 2.753 million bpd in June, according to the JODI database.
The U.S. became the world’s biggest crude oil producer, surpassing both Saudi Arabia and Russia, in 2018, and has kept that status since then, while Saudi Arabia and Russia – bound by their OPEC+ production cut pact to prop up prices and rebalance demand and supply – have been withholding production from the market.
The most recent OPEC+ agreement, which started in May after a brief price war between the two rivals-partners in March and April, currently has Russia and Saudi Arabia cut their production and keep it at 9 million bpd each until the end of this year.
In June, Russia produced more crude oil than Saudi Arabia, beating it to the second place of the largest oil producers in the world, behind the number-one producer, the United States. June was the month in which Saudi Arabia voluntarily slashed its oil production by an additional 1 million bpd for just one month, on top of the 2.5 million bpd it was supposed to cut as per the OPEC+ deal.
In July, Russia kept its place as the world’s second-largest oil producer ahead of Saudi Arabia, JODI data showed.
By Charles Kennedy for Oilprice.com
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How could the United States keep top crude oil producer status when it was never in that position and particularly having lost 50% or 6.5 million barrels a day (mbd) so far this year as a result of the COVID-19 pandemic. If you are wondering how I have come by that figure, I will calculate it for you.
Baker Hughes’ oil rig count is a real measure of oil industry activity. The US Energy Information Administration (EIA) was claiming that US oil production before the COVID-19 pandemic was 13 mbd when the oil rig count was 744 rigs. Since then rigs according to Baker Hughes have declined to 172. This means that shale oil production which accounts for more than 65% of total US oil production currently amounts to 1.95 mbd. Adding a conventional oil production of 4.55 mbd will give a US production of 6.5 mbd meaning that the US oil industry has lost 6.5 mbd so far this year. And yet, the EIA is still maintaining that US production has only declined by 2 mbd from 13 mbd to 11 mbd.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London