Following Iran Withdrawal, US Hits Record High in Oil and Gas Production

Combined Shape

The U.S. has been the undisputed top producer of petroleum and natural gas hydrocarbons for the last six years, finishing 2017 with production levels about double those of Saudi Arabia.

American oil and gas hydrocarbon production hit a record high in 2017 at nearly 30 million barrels per day of oil equivalent, according to the U.S. Energy Information Administration (EIA).

EIA reported on Monday that U.S. “petroleum production increased by 745,000 barrels per day (b/d) in 2017, driven by a 21 percent increase in oil prices to approximately $65 per barrel.”

Of that, “crude oil and lease condensate accounted for 60 percent of total petroleum hydrocarbon production in 2017, and natural gas plant liquids accounted for 24 percent.”

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Source: U.S. energy Information Administration

EIA’s data on booming U.S. oil and gas production comes as the Trump administration re-imposes sanctions on Iran.

The Obama administration ended sanctions in 2015, which allowed Iran to once again export crude oil.

Analysts expect sanctions to add to upward pressures on crude oil prices.

That’s bad news for gasoline prices, but presents an opportunity for oil and gas companies to expand production.

EIA’s short-term energy outlook projects U.S. crude output to hit 12 million barrels a day by the end of 2019.

The U.S. already broke daily production averages this year, hitting 10.15 million barrels per day in February.

Oil and gas production boomed thanks to the advent of hydraulic fracturing and horizontal drilling.

However, U.S. dry natural gas production growth slowed in 2017 because of low prices — largely because the U.S. produces so much gas, it’s insane.

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“Production increased during the last nine months of the year, ultimately leading to a 5.7 billion cubic feet (Bcf/d) difference between the first quarter and fourth quarter of 2017,” EIA reported Monday.

“Russian and Saudi natural gas production expanded significantly in 2017, at 8 percent and 6 percent year-on-year growth, respectively,” EIA reported, adding that “Russian and Saudi total liquids production fell in 2017 compared with 2016.”

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