For the first time since 1975, the United States is poised to surpass Saudi Arabia and Russia as the world’s leading producer of crude oil.
According to research released by Rystad Energy at the end of December, “U.S. crude oil production could pass the levels of both Saudi Arabia and Russia within a year from now.”
The U.S. has already ramped up crude production in 2018, increasing output by 10 percent, reaching about 11 million barrels per day.
Fracking had already revolutionized U.S. oil production, despite serious environmental concerns. However, with the election of U.S. President Donald Trump, the American oil industry has seen a boost, with the new head of state vowing to cut regulations.
Trump has also promised to bring in an era of “American energy dominance,” partially through reducing red tape around oil drilling.
As the shale fracking increased output in the U.S. over the last few years, Saudi Arabia responded by significantly increasing output and flooding the market with oil, starting in 2015. This saw the price of a barrel drop dramatically from about $100 to a low $26.
The market now appears to be re-stabilizing, with Reuters reporting that oil prices have hit their highest-point in two years this week. Currently, a barrel hovers just below $70.
However, as governments around the world turn to renewable energy sources, oil rich nations have begun planning for the future. While Saudi Arabia’s economy has relied on oil for decades, King Salman and Crown Prince Mohammed bin Salman have taken bold steps to change that for the future.
The Crown Prince launched the kingdom’s ambitious Vision 2030 plan in 2016, aiming to ease Riyadh’s reliance on oil and diversify the economy.
Regionally, the UAE has been working on diversification for years, expanding its economy to become a powerhouse for banking and finance, while also positioning itself as a global tourism hub.
Originally published on www.stepfeed.com
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