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USA to leave Saudi Arabia behind in terms of crude production

USA to leave Saudi Arabia behind in terms of crude production. 48431.jpeg

The U.S. Department of Energy recently released a message stating that in 2012 oil production in the country will increase by seven percent. America is opening up its resources and reviewing its energy policy, experts say. If the production of crude oil and other liquid hydrocarbons continues to grow at the same pace, in a couple of years the United States will catch up to the indicators of Saudi Arabia. According to analysts of the International Energy Agency, the level of oil production in Saudi Arabia will remain unchanged until 2017. At the same time, the United States intends to accelerate the development of major oil and gas fields, particularly in Alaska.

In addition, American mining companies will increase the production of non-ferrous and rare earth metals to reduce the dependence of the U.S. industry on imports. In 2010, large deposits of rare earth metals were discovered on the American continent. Two deposits located in the states of Idaho and Montana can meet the needs of the country. As the new deposits are being developed in the U.S., China will lose the monopoly on the production and sale of rare earth elements. But the real sensation was a significant increase in production of "black gold" in the United States. The success of oil drillers is due to the implementation of horizontal drilling technology that greatly accelerates oil production. 

The U.S. has the richest oil fields, 35,000 of them are located in the country. Among them are 300 giant fields (over 13 million tons) and 5 mega-gigantic ones (300 million tons). The U.S. holds 12th place in the world in terms of the volume of usable known oil reserves.

However, the U.S. is also the world's largest consumer of oil and needs 23 million barrels a day. Since 1972, the volume of production of "black gold" began to decline. By 1995, the U.S. production was 368 million tons, and in 2000 - 350 million. Then flows of cheap oil from abroad poured into the country.

In 2002, after the September 11 attacks, the United States became the world's largest oil producer. This was in response to a sharp reduction in production of "black gold" in Saudi Arabia due to lower prices. Later the American oil indicators somewhat lowered. After the disaster at the BP platform in the Gulf of Mexico on April 20, 2010, Barack Obama criticized the U.S. energy policy. The President called this policy unsustainable, emphasizing that the U.S. dependence on foreign oil was too strong. In February of 2012, the President once again mentioned this in his speech in Miami. Obama said that the U.S. needs for energy depend on the global events, for example, the unrest in the Middle East that gave impetus to speculative operations on Wall Street. He also said that American scientists and engineers needed to work out other options - for example, solar and nuclear energy as well as biofuels, "The Voice of America" reported.

However, the abandonment of hydrocarbons is not being discussed. In contrast, in the last three to four years, the situation has changed and the United States saw the oil and gas boom. This year, America has returned to the 14-year high level for the extraction of "black gold" (the maximum was recorded in 1998). In the near future, America may unseal the oil reserves created in 1997.

There are at least two reasons for the change in Washington's policy in the oil sector. First, the U.S. is interested in reducing its dependence on energy imports from the unstable countries in the Middle East. Second, the increase in production of oil, gas and rare earth metals in the country is closely linked to the changes in the global prices of minerals. Now Washington and Riyadh do not hide their interest in a long-term decline in oil prices. For Russia, this scenario is highly undesirable.

In addition, Washington is trying to weaken the positions of Iran, a major oil and gas exporter. In September, Oil Minister Ali al-Naimi said that Saudi Arabia was seriously concerned with the rise in prices for oil. At the same time, the White House welcomed the initiatives of Riyadh aimed at their subsequent decline.

However, the increase in the production of "black gold" in the United States is unlikely to lead to the exports of petroleum products from the United States to the world market, analysts say. The U.S. needs cheap oil to meet the vast needs of the domestic market. One way or the other, the concerted actions of Saudi Arabia and the United States to regulate the price of oil are likely to lead to a turmoil in global markets in the near future.

Yuri Sosinsky-Semikhat


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