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The United States has achieved "overtaking in a corner" ahead of schedule, and may have become the dominant player in oil production.

The United States has achieved "overtaking in a corner" ahead of schedule, and may have become the dominant player in oil production.

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From the beginning of this year, the industry has continuously predicted that the United States may surpass Russia and Russia to become the world's largest oil producer. On the 12th (Wednesday), North American time, the US Energy Information Administration said that according to preliminary estimates, after surpassing Saudi Arabia in February this year, US oil production may surpass Russia in June and August, becoming the world's largest oil producer.
 
    Earlier, the US Energy Agency and the International Energy Agency both predicted that the United States will surpass Russia and Saudi Arabia next year.
 
    According to data provided by the US Energy Information Administration, US oil production in August this year was as high as 10.9 million barrels per day, compared with 10.8 million barrels in Russia and 10.4 million barrels in Saudi Arabia. If the data is confirmed, it will mean that the United States has returned to hegemony after losing its "hegemonic" status in 1973.
 
    The Russian oil data used by the US Energy Agency is mainly from the Russian Ministry of Petroleum, with reference to oil companies and industry publications; the Saudi oil data used comes from the US Energy Agency's own internal estimates.
 
    The US Energy Agency predicts that US oil production will continue to lead Russia and Saudi Arabia for the rest of the year and 2019. However, some media pointed out that both Russia and Saudi Arabia are implementing the OPEC's production restriction agreement, and they have not produced enough horsepower. Whether the United States will continue to lead and there are still variables.
 
    Before the 1970s, US oil production was in a leading position for a long time. Later, with the depletion of some oil fields, Russian and Saudi oil production exceeded the United States. However, more than a decade ago, the United States achieved a technological revolution that was able to extract oil and gas contained in rocks through hydraulic fracturing, which drove the recovery of US oil production.
 
    The Permian Basin in Texas and New Mexico is a major contributor to the resurgence of US oil production. The name of the basin stems from its possession of the world's thickest rock deposits during the Permian boycott.
 
    According to relevant information, the Permian Basin is about 400 kilometers wide, about 480 kilometers long, and has a surface area of ??more than 120,000 square kilometers, including 43 counties in western Texas and southeastern New Mexico. The basin consists of three small basins: Midland, Delaware and Malfa. The US Geological Survey (USGS) estimated in November 2016 that only the technically recoverable tight oil and shale gas in the Midland Basin exceeded 20 billion barrels. The entire Permian basin reserves exceed 60 billion barrels.
 
    Before the oil price plummeted in 2014, the Permian Basin oil production was 1.59 million barrels per day. Since 2016, oil giants have smelled the business opportunities in the Permian Basin and there has been a boom in mergers and acquisitions. In the same year, the amount of M&A transactions in the Permian Basin reached US$25.6 billion, accounting for 41% of the total upstream M&A in the US oil and gas industry; in the first quarter of 2017, the transaction amount was US$18.1 billion.
 
    As oil prices rose and investment increased, oil production in the Permian Basin rose linearly. From December 2015 to March 2017, the number of newly added drilling platforms increased by 280% per month, and the output increased from less than 2 million barrels per day to 2.3 million barrels. In May of this year, the oil production in the basin reached 3.2 million barrels per day. The huge increase in production in the Permian Basin and the Bakken Basin in the northern United States directly referred to US oil production from 9.3 million barrels per day a year ago to nearly 11 million barrels today.
 
    According to Reuters, IHS Markit even predicted in June that oil production in the Permian Basin oilfield could reach 5.4 million barrels per day in 2023.
 
    Daniel Yergin, author of the Pulitzer Prize for Literature and the global game of oil, money and power, said that the rebound in US oil production would help avoid a severe shortage of global oil and a sharp rise in oil prices.
 
    However, the US Energy Agency also mentioned that hydraulic fracturing oil and gas exploration technology is still controversial in the United States. Environmental groups believe that hydraulic fracturing can cause groundwater pollution and increase the number of earthquakes in places such as Texas and Oklahoma. A few years ago, Vermont and New York State banned hydraulic fracturing in the country.
 
    Another fact that is unfavorable to the US oil industry is that the Permian Basin has insufficient capacity and it is difficult to afford a sharp increase in oil production. Some analysts are divided into insufficient transportation capacity, which will force the Permian basin producers to stop drilling new wells in the second half of the year, thus affecting the continued rise of US oil production.

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