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US soon to leapfrog Saudis, Russia as top oil producer

US soon to leapfrog Saudis, Russia as top oil producer

July 12th, 2018 by the Associated Press in Business

FILE - In this June 8, 2017, file photo, oil derricks are busy pumping as the moon rises near the La Paloma Generating Station in McKittrick, Calif. The U.S. is on pace to leapfrog both Saudi Arabia and Russia as the world’s biggest oil producer. (AP Photo/Gary Kazanjian, File)

The U.S. is on pace to leapfrog Saudi Arabia and Russia and reclaim the title of the world’s biggest oil producer for the first time since the 1970s.

The latest forecast from the U.S. Energy Information Administration predicts U.S. output will grow next year to 11.8 million barrels a day.

“If the forecast holds, that would make the U.S. the world’s leading producer of crude,” said Linda Capuano, who heads the agency, a part of the Energy Department.

Saudi Arabia and Russia could upend that forecast by boosting their own production. In the face of rising global oil prices, members of the OPEC cartel and a few non-members including Russia agreed last month to ease production caps that had contributed to the run-up in prices.

President Donald Trump has urged the Saudis to pump more oil to contain rising prices. He tweeted June 30 King Salman agreed to boost production “maybe up to 2,000,000 barrels.” The White House later clarified the king said his country has a reserve of 2 million barrels a day that could be tapped “if and when necessary.”

The United States led the world in oil production for much of the 20th century, but the Soviet Union surpassed America in 1974, and Saudi Arabia did the same in 1976, according to Energy Department figures.

By the end of the 1970s the USSR was producing one-third more oil than the U.S.; by the end of the 1980s, Soviet output was nearly double that of the U.S.

The last decade or so has seen a revolution in American energy production, however, led by techniques including hydraulic fracturing, or fracking, and horizontal drilling.

Those innovations — and the breakup of the Soviet Union — helped the U.S. narrow the gap, although Russia and Saudi Arabia pumped more crude than the U.S. last year.