U.S likely to become second largest oil producer in the world

The U.S is all set to take over Saudi Arabia as the second largest oil producer in the world. Russia will remain the largest oil producer in the world. This was predicted by International Energy Agency in its latest monthly report on energy.  The U.S production has increased in last few months as shale companies, attracted by rising prices, ramp up drilling, says the report.

The U.S Crude production has reached to 9.9 million barrels per day (bpd), which is the highest level in nearly 50 years. This production level is neck-and-neck with Saudi Arabia. U.S production expected to reach 10 million bpd during 2018 if prices continue to rise. “US growth in 2017 beat all expectations … as the shale industry bounced back, profiting from cost cuts, (and) stepped up drilling activity. Explosive growth in the US and substantial gains in Canada and Brazil will far outweigh potentially steep declines in Venezuela and Mexico,” it said.

Shale production is controversial, because in order to extract oil and gas, a high-pressure mixture of water, sand and chemicals are blasted deep underground to release hydrocarbons trapped between layers of rock. Among OPEC producers, Saudi Arabia saw the biggest reward, making nearly $100 million a day in additional revenue. Beleaguered Venezuela, on the other hand, only earned an extra $9 million.

Russia, not a member of the cartel, earned the most of all, pocketing an additional $117 million a day, the IEA calculated. Rising prices have, in turn, made it more attractive for shale companies to increase drilling. Crude recently rose above $70 per barrel for the first time since 2014 after OPEC and non-OPEC countries agreed to extend their combined cutbacks until the end of this year.