The United States became the world’s top oil producer in February, and now it may use its leverage to reinforce its position as a geopolitical force.
In a dynamic that shows just how far US oil production has come in recent years, the US Energy Information Administration (EIA) said on Monday that in the last two months of 2018, the US Gulf Coast exported more crude oil than it imported.
Monthly net trade of crude oil in the Gulf Coast region (the difference between gross exports and gross imports) fell from a high in early 2007 of 6.6 million barrels per day (bpd) of net imports to 0.4 million bpd of net exports in December 2018. As gross exports of crude oil from the Gulf Coast hit a record 2.3 million bpd, gross imports of crude oil to the Gulf Coast in December—at slightly less than 2.0 million bpd—were the lowest level since March 1986.
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US oil production hit a staggering 12.1 million bpd in February, while that amount has been projected to stay around that production mark in the mid-term then increase in the coming years. The US is the new global oil production leader, followed by Russia and Saudi Arabia, while Saudi Arabia is still the world’s largest oil exporter – a factor that still gives Riyadh considerable leverage, particularly as it works with Russia, and other partners as part of the so-called OPEC+ group of producers. However, Saudi Arabia’s decades-long role of market swing producers has now been replaced by this coalition of producers, reducing Riyadh’s power both geopolitically and in global oil markets. In short, what Saudi Arabia could once do on its own, it has to do with several partners.
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Meanwhile, US crude oil production, particularly in the Gulf Coast region, is still increasing. In November 2018, US Gulf Coast crude oil production set a new record of 7.7 million bpd,