Production, import and export of oil and gas to the United States

Main article: Oil and gas production

Natural gas reserves

2023

The United States has become the main beneficiary of sanctions against oil from Russia and Venezuela

Who became the main beneficiary of sanctions against Russian and Venezuelan oil? American suppliers that have made their way to markets formerly dominated by OPEC and its allies.

The United States became the largest exporter of oil after the outbreak of war in Ukraine.

US becomes world's biggest LNG exporter for first time

The US has become the world's largest LNG exporter for the first time, with shipments bypassing Australia and Qatar in 2023.

The United States leads the world in oil production and sets new records

U.S. crude production led global oil production for the sixth consecutive year with a record average of 12.9 million bpd (bpd), the EIA said in a release.

In December 2023, crude oil production in the United States reached a new monthly record of more than 13.3 million barrels per day.

The United States for the first time since April 2022 began to officially purchase Russian oil

For the first time in a year and a half, the United States began to officially purchase Russian oil. This is evidenced by the data of foreign trade statistics of the United States published in January 2024.

According to the document, in November 2023, the United States imported 9,860 barrels of crude oil of Russian origin in the amount of about $749.5 thousand. Thus, the price per barrel amounted to about $74.9, which is higher than the US ceiling for Russian oil prices. In October 2023, the United States acquired 36.8 thousand barrels of oil from Russia for $2.7 million.

The last time before that, Russian oil was imported to the United States in April 2022: then the United States purchased 709,000 barrels of the resource for $84.9 million. At the end of 2023, the average cost of Russian oil was $62.99 per barrel, in 2022 - $76.09. The fall was explained by a general decline in oil prices and tightening pressure from the United States.

According to Maxim Kanishchev, Managing Director of Rusenergoproekt, the United States could resume importing Russian oil in order to make "verification" purchases, understand the logistics of delivering "black gold" from Russia in the new conditions and form new measures against non-compliance with the price ceiling.

The refinery shutdown is millions of dollars in losses per day. Therefore, if the necessary oil cannot be bought anywhere else, except in Russia, the import of Russian oil, despite the potential reputational risk, is considered justified by the owners of the refinery. The principle "money comes first," the expert explained.

He added that the resumption of imports could be due to contractual obligations that American legal entities were required to comply with in order to avoid legal complications and economic losses.^[1]

U.S. International Trade in Goods and Services November 2023

The United States has expanded its claims to the ocean floor

In December 2023, they expanded their claims to the ocean floor to an area twice the size of California, securing rights to a potentially resource-rich seabed at a time when Washington is ramping up efforts to preserve mineral reserves key to future technology.

The so-called expanded continental shelf covers about 1 million square kilometers (386,100 square miles), predominantly in the Arctic and the Bering Sea - a zone of increasing strategic importance also claimed by Canada and Russia. The US also announced shelf boundaries in the Atlantic, Pacific and Gulf of Mexico.

Record oil production

In 2023, US drillers increased oil production much more than analysts assumed, bringing production to a record level just as OPEC and its allies slowed supplies in an attempt to stop prices from falling.

Technical restrictions on replenishment of the oil reserve not more than 3 million barrels per month

In early December 2023, it became known that the administration of US President Biden may not be able to fully take advantage of the recent fall in oil prices, trying to replenish the depleted reserve of crude oil, said a second official of the Department of Energy.

The U.S. Strategic Petroleum Reserve is at its lowest level since the 1980s, but physical constraints and maintenance of a network of underground caves along the Gulf Coast limit the amount the Energy Department can purchase to about 3 million barrels per month, said Deputy power Secretary David Turk. The Department of Energy hopes to commission more capacity.

Oil became the largest U.S. export for the first time since 2009

According to the results of January-September 2023, the volume of oil supplies from the United States to world markets reached $86 billion in monetary terms. As a result, this raw material became the country's largest export for the first time since 2009, as evidenced by data from the Bureau of Economic Analysis, published on November 7, 2023.

The report says that in the period from 2009 to 2021, the first and second positions in the list of the main export products of the United States were divided by aircraft and oil products. In particular, as noted by RIA Novosti, aircraft led in 2009-2010. and in 2015-2020. inclusive. In other years, during the period under review, the first line of the rating was held by petroleum products.

However, in 2022, the situation began to change: oil rose to second place, displacing planes from it. And according to the results of the first three quarters of 2023, oil broke into the lead. In second place were oil products: their supplies decreased on an annualized basis by 19%, amounting to $83 billion during January-September 2023. The top three are closed by aircraft, the export of which brought the United States about $81 billion - this is 19% more compared to 2022.

The five largest US exports also included gas and cars, which brought the country $50 billion and $48 billion, respectively. At the same time, gas revenues on an annualized basis decreased by almost a third, while the automotive segment recorded an increase of 11%.

It is also noted that over the course of three years (by the end of 2023), the composition of the five main US export products as a whole has not changed: these are oil, oil products and aircraft. Earlier, the Top 5 included drugs, phones, microchips, vehicle parts and gold. According to Eurostat, by the end of 2022, the United States came out on top in oil supplies to the European Union.^[2]

US share of EU LNG shipments rises to 49%

The supply of Russian LNG to the EU in August 2023 decreased due to the repair of plants and a decrease in demand. The country's share of EU LNG imports in August fell to about 10% - down from 19% in March 2022 during panic purchases linked to the outbreak of conflict in Ukraine.

The share of the United States, the first LNG supplier to Europe, increased to 49% in August 2023, and Qatar retained its 15%.

Decrease in strategic oil reserve to 347 million barrels and resumption of purchases

The presidential administration USA Joe Biden announced on July 7, 2023, the purchase of another 6 million barrels of crude oil for the Strategic Petroleum Reserve, continuing to slowly replenish emergency supplies.

Production of diesel fuel from grain and fat is growing sharply

The production of renewable diesel fuel is USA gaining momentum - according to the Energy Information Administration, its capacity will reach approximately 385,000 barrels per day by 2025, more than twice as much as at the end of 2022.

Generous federal incentives have contributed to a surge in the production of clean fuels from cereals and animal fat, which can be replaced by oil-based diesel.

In June 2023, the EPA is due to decide how much biomass-based diesel should be included in the country's fuel balance in 2023, 2024 and 2025, amid concerns that proposed targets underestimate potential output.

India's US imports hit record highs

By April 2023, imports of petroleum products from India to the United States reached record levels.

Saudi Arabia bypasses US in diesel exports due to its imports from Russia

Saudi Arabia is buying up millions of barrels of Russian diesel, which Europe no longer allows, while sending its own volumes back to buyers in the EU. In April, diesel and gas oil exports from Saudi Arabia exceeded US volumes.

U.S. shale oil production is near peak. Decline in a few years will raise prices and accelerate inflation

Wall Street is finally about to cash in on shale fields. This will have a profound impact on the planet. U.S. production is likely to peak in the next three to five years, and certainly before the end of this decade.

Less production growth means better returns for shale shareholders.

For nearly two decades, shale mining has been ruinous for shareholders, but it has greatly benefited the rest of America. It supported low oil prices, provided jobs and investment. But things are changing, Javier Blas wrote for Bloomberg Opinion in April 2023. This is the beginning of the end of the greatest American oil boom.

The shale boom was the most lucrative example of capital destruction the energy industry has ever seen. Investors lost, but the U.S. and most of its allies won. Things will change in the next few years, with Wall Street making a profit at the expense of Washington and Main Street. The consequences are likely to be higher oil prices - and inflation - and weakening U.S. energy policy positions.

The United States strengthens its position as an oil and gas exporter: from net imports of 13 million to net exports of 3 million barrels/d

The United States switched to sustainable net exports of oil and petroleum products in April 2022 and since then the United States has never lost this status, and export potential is gradually increasing.

From April to August 2022, the net export potential of oil and petroleum products was no more than 1 million barrels per day, from August to December the possibilities sharply increased to 1.5-2 million barrels/d, by March 2023 to 3 million barrels/d and now about 2 million barrels/d.

For comparison, in 2005-2007, the United States was a net importer of oil and oil products by 12.5-13.5 million barrels/d, and after a radical change in the energy doctrine, the United States significantly increased oil production and oil refining capacity, which made it possible to correct the imbalance by 16 million barrels/d (from net imports of 13 million to net exports of 3 million barrels/d).

In the structure of foreign trade supplies, the United States remains a net importer of crude oil by 2 million barrels/d compared to 10-10.5 million in 2005-2007 and 7-7.5 million barrels/d in 2015-2017, i.e. over 5-6 years, more than 5 million barrels/d were removed from net imports, almost completely eliminating dependence on oil supplies from Africa and the Middle East.

For petroleum products, the United States was a net importer of 2-3 million barrels per day in 2005-2007, first became a net exporter in early 2012 and gradually strengthened its capabilities in this area. In the period from 2019 to 2021, net exports of petroleum products amounted to 2-4 million (an average of about 3 million) barrels/d, and as of April 2023 for petroleum products will stabilize on net exports of 4-4.5 million barrels/d.

Since 2021, the United States has improved its energy balance by an average of 4 million barrels/d, where crude oil is 2.2 million and petroleum products are 1.8 million barrels/d.

In the structure of foreign trade flows of energy carriers, there were practically no changes in the import of oil or petroleum products, and all the improvement went on export flows - the most significant for crude oil. The dominant direction of supply is Europe.

The United States deftly squeezed Russia out of the European market, both in gas and oil and oil products in just one year.

Texas Demands U.S. Government Allow to Extract More Energy

President Joe Biden should stop harming oil production in the United States, the Texas oil regulator said in April 2023.

They called the president's energy policy "destructive" and called on him to let American operators produce more energy.

Reduction of strategic oil reserves to 371 million barrels - minimum since December 1983

Crude oil inventories in the United States fell significantly again at the end of March 2023, by 4.35 million barrels, data from the American Petroleum Institute showed. At the same time, analysts expected a decrease of 1.8 million barrels.

Strategic reserves declined for the first time in 12 weeks, losing 400,000 barrels and reaching 371.2 million barrels - the lowest volume since December 1983.

US shale boom in oil production slumps

According to March 2023, shale producers face serious problems - oil wells in the Perm basin, where the lion's share of American "black gold" is produced, produce less and less oil.

Moreover, problems with the depletion of oil reserves in the United States are felt immediately in many states at the same time - from South Dakota to Texas and New Mexico to Delaware. For example, in Delaware, 10% of the best wells on average produce 15% less oil than 6 years ago.

Over the decade of the shale boom, the United States was able to increase oil production almost twice - from 7 million barrels per day in 2009 to 13 million barrels before the start of the COVID-19 pandemic. But then oil production decreased - and so far it cannot return to the level of three years ago.

Sharp decline in gas prices

By the end of January 2023, gas prices in the United States fell below the level before the outbreak of the conflict in Ukraine in February 2022.

Change of strategy: from taking over fields in other countries to developing its own oil and gas industry

The low demand for oil and oil products in the United States in early 2023 allows us to stabilize the energy balance and continue to implement their energy doctrine to reduce import dependence on energy resources and realize export potential.

For 15 years (since 2008), the United States has consistently pursued its goal of energy neutrality, i.e. the ability to cover oil and gas needs from its own resources, which is fundamentally different from the 1985-2008 doctrine of establishing dominance in key regions of oil and gas production and unconditional control of transport routes.

Under the previous version of the energy doctrine, expansion was started in the Middle East (as a response to the energy crisis of the 1970s and 80s) with shock methods (through wars, overthrowing governments, and establishing controlled regimes in Africa and the Middle East). Oil and gas corporations in the United States and Europe established control over oil fields, and oilfield services companies served and continue to serve all key oil exporters in the world.

Now the strategy is changing, the Spydell Finance channel noted. At first, the United States cut/isolated imports from the Middle East, replacing oil imports from Canada and Mexico, and in the past 7-8 years have made progress in developing its own oil and gas industry.

As a result, in 2007, the United States was a net importer of 13 million barrels/d, at the beginning of 2023, a net exporter of up to 2 million barrels/d. Literally everything changes for this.

As for demand, the most capacious component is sinking - the demand for gasoline, which fell by 6.5% YoY and is at 10 summer lows. The reason is the expansion of electric cars, a decrease in mobility after COVID-19 (an increase in remote work), an increase in the energy efficiency of cars over the past 10-15 years, and the updating of crisis processes.

The demand for gasoline is about 1 million barrels/d below the "norm," the demand for aviation kerosene is 400 thousand barrels/d below the norm, diesel fuel is stagnating. Other types of fuels and oils increased by 700 thousand barrels/d.

Total demand fell by 1-1.3 million barrels/d to 20 million barrels/d, which is why the energy balance was unloaded.

US House of Representatives approves ban on oil sales to China from strategic reserves

In January 2023, the US House of Representatives approved a ban on the sale of oil to China from strategic reserves. In 2022, Unipec America, a subsidiary of the Chinese state oil company Sinopec, received almost 1 million barrels of oil from SPR.

Republicans accuse Joe Biden's administration of depleting strategic oil reserves due to political motives after an unprecedented 180 million barrel sale from SPR over several months to combat rising energy prices caused by the conflict in Ukraine and anti-Russian sanctions.

Energy supplies from the United States to the EU caught up with supplies from Russia

American oil producers abandon oil projects in Africa and try to transfer them to Britain

In January 2023, news continues to arrive from Africa about the curtailment of American oil production projects.

Over the past two years, the continent's largest oil asset owner ExxonMobil has announced its withdrawal from Nigeria, Equatorial Guinea, Ghana, Niger, South Africa, Chad and Cameroon.

In early January 2023, another American company Chevron confirmed rumors of plans to leave Nigeria with its new investment program.

It is estimated that American companies sell about 30% of their assets in Africa.

One of the main reasons is the need to concentrate on production in South and North America. According to OPEC estimates, against the background of a reduction in crude oil production in Africa, production in the Americas will grow to 28 million barrels per day in 2023, which is 2.3 million barrels per day more than before the pandemic.

This reversal is due to the greater profitability and attractiveness of projects for investment.

In addition, American companies are worried about strengthening cooperation between Russia and China with the countries of South and Central America. In this light, "home" projects are becoming a priority for the United States for African.

Another reason is the need to use the funds allocated by the US government for the development of green power. US companies are guaranteed access to these funds, which will make it possible to advance in the production of LNG and hydrogen, as well as provide cheap energy resources to European companies in the "relocation" stage in the United States.

American TNKs are developing the most high-tech segment of the energy market at state expense, while pulling key technologies from the EU, the Rybar channel noted.

In America's dwindling TNK fields in Africa, oil pumping is declining and pollution and infrastructure maintenance costs are rising. Given the risk associated with terrorism, corruption, and other factors associated with most projects in Africa, it becomes more profitable to sell their assets than to develop new deposits.

Buyers of American assets in Africa can only be companies with comparable levels of technology and access to the capital market. Local companies, with all the desire, will not be able to independently develop oil and gas projects in Africa.

And in order to avoid the departure of these valuable assets under the control of companies from Russia and China, the US oil and gas giants are trying to transfer them under the control of their colleagues from Britain in an organized manner.

A wide network of offshore companies, organized by companies from Britain and Holland with the permission of US regulators, is used both to obtain funding from the world's largest banks and to conceal the ultimate beneficiaries operating in Africa.

Since the mid-2010s, British oil companies have begun active expansion in African countries. Moreover, British companies are ready to work with risky but profitable enterprises, such as LNG projects in Mozambique.

A recent example of such Anglo-American cooperation was [2] ExxonMobil's December deal to sell its Chad and Cameroon division to British company Savannah Energy for $407 million .

As a result of the transaction, the British company received partial control over seven promising fields and a large logistics project - the Chad-Cameroon oil pipeline.

The sale of assets of American TNKs is often positioned in the pan-African media as a kind of "retreat of neo-colonialists" and the redistribution of resources in favor of "local" companies engaged in mainly African projects. At the same time, the fact that "local" companies are often only an offshore shell behind which capital from Britain is hidden is delicately silent.

Chevron sent the first ships with oil produced in Venezuela to the United States

Chevron in January 2023 sent the first ships with oil produced in Venezuela to the United States.

2022

The rise of oil and gas exports due to the displacement of Russia from the EU market through the conflict in Ukraine

The United States is becoming the world leader in the export of oil, oil products and gas.

Oil exports in 2022 amounted to $116.8 billion against $69 billion in 2021 (+ 69%), and imports 198.1 billion/133 billion in 2021. Here is a negative trade balance of 81.3 billion against minus 63.7 billion.

Exports of petroleum products rose to $151.2 billion against $96.2 billion in 2021 (+ 57%), and imports of only 89 billion/68.1 billion in 2021, respectively, the positive balance rose sharply to 62.1 billion against 28.1 a year earlier.

Gas exports increased to $63 billion compared to $40.1 billion in 2021 (+ 57%), while imports 22.9/17.8 billion, the trade surplus increased to 38 billion against 23.8 billion in 2021.

NGL exports (propane, butane, isobutane, pental) increased to $37.7 billion, and in 2021 - $30.8 billion, imports for this group are not recorded by the United States.

Thus, oil, oil products, gas and gas condensate of the United States export by $368 billion against 236 billion in 2021, and import by 304 billion in 2021 and 211.4 billion in 2021. The trade surplus for the oil and gas group grew from 25 billion to a record 64 billion.

The United States has definitely become a net exporter of the oil and gas group, which has been proven on the basis of foreign trade revenue.

According to preliminary calculations by Spydell Finance, gross oil and gas exports are approximately comparable to Russian exports in 2022 and will exceed Russian exports in 2023.

Oil reserves in the US strategic reserve dropped to 375 million barrels

Oil reserves in the strategic reserve USA dropped to 392.1 million barrels, at least since March 1984, the US Department of Energy said on November 16, 2022.

In the week to December 2, 2022, reserves dropped to 387 million barrels, the lowest since February 1984.

In the week to December 9, reserves dropped to 382.3 million barrels, the lowest since January 1984.

By December 23, 2022, the United States spent almost half of its strategic oil reserve, which fell to 375 million barrels, to keep gasoline prices.

At the end of 2022, the withdrawal of strategic reserves ceased.

Oil export record: 11.4 million bpd

In the penultimate week of October 2022, the United States set a record for the volume of exports of oil and petroleum products, writes the Financial Times. It exceeded 11.4 million barrels per day. Compared to the previous week, supplies increased by almost 2 million barrels per day.

The United States bypassed Russia and Saudi Arabia in oil exports and seeks leadership in gas exports

The United States not only became the world's largest exporter of oil and petroleum products in terms of gross volume, overtaking Russia and Saudi Arabia in the spring of 2022 and autumn of 2022, but also on a full path to leadership in gas exports.

Official information from EIA comes out with a long delay of 3-4 months, but according to preliminary data for the first 9 months of 2022, the total (LNG + pipe) gas export from the United States amounted to 146 billion cubic meters, despite the Freeport LNG accident.

Gas exports for 9 months 2022 increased by 5% by 2021 and increased by an impressive 40% by 2020. By the end of 2022, the expected growth in gas exports will be 9% to 200-205 billion cubic meters, which will definitely take the United States to the first place, ahead of Russia, the export of which could be about 170-180 billion cubic meters (pipe + LNG).

The opening of new LNG plants in 2022 and the elimination of the consequences of the accident at Freeport LNG brings to the export potential about 225 billion cubic meters of gas in 2023.

The closing rate of the energy gaps is impressive. From 2000 to 2007, the United States on average had 90-100 billion cubic meters of net gas imports, from 2008 they transformed the energy doctrine and embarked on the path of energy neutrality (reducing net oil and gas imports to zero).

At the end of 2017, the United States entered net gas exports, but within the accuracy of the bill. Since 2018, net exports have only increased - 20 billion cubic meters in 2018, 54 billion cubic meters in 2019, 77 billion cubic meters in 2020, about 108 billion cubic meters in 2021 and according to preliminary estimates over 120 billion cubic meters in 2022, guaranteed ahead of previous leaders (Australia and Qatar).

In terms of net gas exports, Russia was ahead in 2022, but will give way to the United States in 2023. Thus, in terms of net gas exports, the United States will be ahead of Russia, Australia and Qatar in 2023.

LNG exports to Europe are growing at an unprecedented rate, and volumes are breaking records. From January to October 2022, US LNG supplies reached 62 billion cubic meters, compared with 24.2 billion in 2021, 21 billion cubic meters in 2020 and 13.6 billion cubic meters in 2019 for the same period of time.

The Freeport LNG crash has knocked down export potential somewhat, but achievements in 2022 are impressive. Almost 70% of the structure of American LNG exports went to Europe.

American LNG exporters took advantage of the situation on time and very well and redistributed flows from Asia to Europe, using the opportunity to seize the market, compensating themselves for the costs. Europe generously paid for energy transformation and detachment from Russia, and the United States became the main and unconditional beneficiary. All that could be redistributed to Europe under existing contracts with Asian partners was redistribution. Everything that could be squeezed out of the existing fleet of gas carriers and physical capabilities by the terminal was squeezed out.

The battle for Europe's energy market has remained with the US, where the States are gaining dominant influence and trying to lock in the position through long-term discounted contracts ($400-600 per thousand cubic meters). The US has skillfully exploited chaos in disorientation to its advantage - rising exports, a takeover of a key market and generous compensation.

The estimated export potential of the United States in 2023 is 125-130 billion cubic meters of LNG, if there are no accidents, which will significantly strengthen the gap from the main competitors.

The United States has firmly taken up the gas market and is not going to let it go. According to the plan, the deployment of export capacities up to 150 billion cubic meters by 2026.

The world is changing very quickly and the turn is quite unexpected, the Spydell Finance channel noted. The US energy doctrine directly influences policy and there has been a shift in focus from the Middle East to Europe.

The decision to sell another 15 million barrels of oil from the strategic reserve, reduced to 405 million barrels

On October 18, 2022, it was announced that USA 15 million barrels of oil from the country's strategic reserve would be put up for sale.

Continued oil production growth

Oil reserves fell to October 1984 - 427 million barrels

By September 2022, oil reserves in the United States fell to October 1984. Oil reserves in the United States fell to a record 434.1 million barrels, oil reserves are withdrawn amid rising gasoline prices and inflation. President Joe Biden made such a decision in March, when the cost of a gallon of gasoline reached $5 per gallon.

Later, the strategic reserve of oil in the United States fell to a minimum in almost 40 years to 427.2 million barrels as of September 16, follows from the weekly report of the Energy Information Administration (EIA).

U.S. Oil and Petroleum Product Exports Set Records

New decline in oil reserves to a minimum in 35 years

US strategic oil reserves in the week of mid-August 2022 again decreased by 8.1 million barrels.

The volume of US reserves has reached a 35-year low.

During NATO exercises, US divers install explosives under the Russian Nord Stream gas pipeline

Legendary American journalist Seymour Hersh said in February 2023 that US divers, under the guise of NATO exercises in the summer of 2022 (BALTOPS 22), planted explosives under the Northern Streams. The Norwegian authorities were also involved in the explosion, since it was the Norwegians who activated the bomb.

Hersh claims that US President Biden decided to sabotage Nord Stream after more than 9 months of secret discussions with the national security team. For much of that time, the question was not whether to carry out the mission, but how to carry it out without clear clues about who was responsible.

The United States for the first time supplied more gas to the EU than Russia

In June 2022, the United States for the first time supplied more gas to the EU than Russia.

Reduction of strategic oil reserves to 1987 level

In May 2022, strategic oil reserves in the United States broke through at least January 2001 and collapsed to the level of 1987, 532 million barrels.

Over the past month, strategic stocks are declining at an average of 5.3 million barrels per week. From February 25 to May 20, strategic reserves fell by 50 million barrels - a record reduction for the same period of time.

At the same time, commercial stocks are balanced at an 8-year low.

Plan for largest ever oil sell-off from U.S. strategic but troubled reserves

On March 31, 2022, US President Biden announced the largest release of oil reserves in US history. The United States will additionally release 1 million barrels per day from reserves for 6 months.

According to the American administration, the United States will print out strategic reserves in coordination with allies "around the world" - other countries will join this step.

Biden's oil plan relies on a 1970s reserve with a troubled history.

The reserve, the world's largest emergency reserve, was created after the Arab oil embargo of the early 1970s, but its distribution system was designed for a 25-year lifespan, and previous test sales have identified problems that could hinder the rapid movement of oil.

The tank, which stores 568 million barrels of oil in underground salt caves in four storage facilities in Texas and Louisiana, collapsed tanks and rusted pipes.

An analysis by the Department of Energy in 2016 found that the SPR could effectively distribute not 2.56 million barrels per day, but potentially no more than 280,000 barrels per day, depending on the scenario.

The rise in the cost of oil production to a record $28

The cost of oil production in the United States amounted to $28 per barrel in the first quarter of 2022. For the United States, this is a new record.

Pipe shortage does not allow to quickly increase shale oil production amid conflict with Russia

Adding to the growing list of reasons why American shale oil producers in March 2022 are not increasing production as quickly as necessary amid the global energy crisis is a shortage of steel.

To drill more wells, they need steel pipes to lay inside the wells and bring oil out. These pipes have become more expensive and scarce.

The price of pipes (oil-country tubular goods, OCTG) USA hit $2,400 dollars a tonne this month, up 100% from a year ago, according to KeyBanc Capital Markets.

According to the US Office of International Trade, Russia and Ukraine combined provide about 15% of all metal imported into the US. Russia also supplies a key ingredient for welded products known as a coupling.

Sharp reduction in strategic oil reserves

In March 2022, strategic oil reserves are sharply reduced in the United States.

Redistribution of US gas exports to Europe

In January 2022, gas carriers from the United States sharply increased supplies to Europe.

Surge in U.S. oil demand

The US oil market continues to warm as oil demand hit a record high.

U.S. crude inventories fell to their lowest level since 2018, amid depletion at Cushing. Total U.S. oil reserves fell to their lowest level since 2015. Tensions in American markets have pushed oil prices and retail fuel prices to levels not seen since 2014.

2021

US is the world leader in oil production

The third exporter of liquefied natural gas in the world

Main Article: Liquefied Natural Gas (LNG)

US considers banning exports and sales of oil from strategic reserve

In October 2021, the administration of US President Joseph Biden is considering the possibility of selling part of the oil reserves from the Strategic Reserve (SPR) and at the same time does not exclude the ban on oil exports from the list of measures that can be taken to stabilize prices. This was at the Financial Times conference on energy transition, said US Energy Secretary Jennifer Granholm.

The sale of oil from the Strategic Reserve is a logical step in the conditions of overheating of the oil market, which in a similar situation was taken by the administration of Barack Obama. In the summer of 2011, when the price of Brent was above $110 per barrel, 4% of reserves (30 million barrels) were sold from the Strategic Reserve. True, the effect of this measure was limited: it helped to reduce retail prices for gasoline (from $3.7 per gallon in July 2011 to $3.5 in October and $3.3 in December, according to the US Department of Energy), but almost did not affect oil prices - by the end of 2011 Brent was still above $110 per barrel. In the current environment, the sale of stocks from SPR may have the same effect - to cool gas prices, which in the United States from January to September 2021 increased by 35% (from $2.4 to $3.3 per gallon), but only slightly affect Brent, which has doubled over the past year thanks to the recovery in oil demand, the soft monetary policy of central banks and, until recently, the cautious attitude of OPEC + towards easing quotas. These factors are beyond the reach of the US Department of Energy as a regulator.

Another thing is the ban on oil exports, which has been in effect in the United States for forty years, from 1975 to 2015. After this ban was lifted by the Barack Obama administration, the United States quickly began to turn into a significant player in the oil market: In 2016-2020, oil supplies from the United States increased more than fivefold, from 0.6 million barrels per day (b/d) to 3.2 million b/d, and the States themselves in terms of export volumes ranked fifth in the world, losing in 2020 only to Saudi Arabia (7 million b/d), Russia (5.2 million b/d), Canada (3.8 million b/d) and Iraq (3.6 million b/d).

Given that the volume of American exports (3.2 million b/d in 2020) exceeds the October OPEC quota to cut production (2.9 million b/d, excluding countries outside the cartel that joined the deal), the US withdrawal from the world market for a while may become an additional driver of rising oil prices, which already "broke" the mark of $80 per barrel. IRTTEK forecast However, the Biden administration is still unlikely to agree to such a measure. A more likely scenario is bans and restrictions on the development of infrastructure necessary to increase exports. Similar to the ban on the construction of the Keystone XL oil pipeline, which was announced immediately after Biden's inauguration. This oil pipeline was to be one of the branches of the Keystone system, which was supposed to allow the transportation of oil produced in Canada to export ports on the Gulf Coast.

In 2021, the pace of commissioning of new infrastructure slowed down significantly: if in 2020 a 24 pipeline for the transportation of oil, gas and petroleum products was put into operation in the United States, then in the first half of 2021 - only 2. According to the US Department of Energy, by mid-2021, 17 more projects were announced, of which 12 were for the transportation of crude oil, including the Seashore oil pipeline with a capacity of 800,000 b/s, which will transport oil to Louisiana: the first deep-sea port in the United States is located here, capable of servicing heavy oil tankers for export, which can take 2 million barrels of oil on board at a time. The shortage of such ports in the United States is holding back American oil exports. The construction of three more similar ports can solve the problem - Blue Marlin (with a capacity of 1.9 million bpd), Bluewater (1.9 million bpd) and GulfLink (1 million bpd), projects of which are now under consideration by the US Maritime Administration (MARAD). MARAD's refusal cannot be ruled out given the Biden administration's Green Deal, which has already imposed a moratorium on leasing new oil production sites on federal lands.

Canada and Russia are the largest importers of oil to the United States

In 2021, Russia supplies more oil to the United States than any other foreign producer except Canada.

U.S. imports of crude oil and petroleum products from Russia rose 23% in May to 844,000 barrels per day from the previous month.

Little-known products such as fuel oil 100 are also in high demand in the US.

2020

Imports of oil and petroleum products from Russia to the United States rose to a record since 2011

By the end of 2020, imports of oil and petroleum products from Russia to the United States reached an average of 538 thousand barrels. per day, which was the highest value since 2011, when supplies were measured 624 thousand barrels. per day. Such data are provided by the Energy Information Administration of the US Department of Energy.

The share of imports of Russian oil and petroleum products to the United States in 2020 amounted to 7%. 20 years ago, this figure did not exceed one percent, having crossed this threshold only in 2001 and reached 5.5% in 2011, and then decreased and again rose to 5.7% in 2019.

in the

In 2020, the supply of oil and oil products American to the market was in the lead (Canada 4.1 million barrels. per day) and (Mexico 750 thousand).

According to Bloomberg, the main product supplied by Russia to the United States is fuel oil. The country uses it to maintain the operation of gasoline production plants. The largest importers last year were Valero and Exxon (55 and 50 million barrels, respectively). These two companies provided about 50% of Russian oil imports. 

The total volume of imports of oil and petroleum products to the United States amounted to 2.87 billion, the volume of imports from Russia - 196 million barrels. More than half of oil resources in 2020 (1.5 billion barrels) were imported from Canada.

According to experts, Russian fuel was cheaper than that of other countries, so the United States bought it more readily. He also notes that fuel from Russia replaces oil products from Venezuela. Most of the American plants are designed for heavy Venezuelan oil. According to its characteristics, it can replace Russian raw materials.

Demand for Russian oil in the United States is growing amid a decline in supplies from Saudi Arabia, which in recent years has increasingly reoriented its supplies to a more premium Asian market.^[3]

Oasis Petroleum files for bankruptcy

In September 2020, the American oil and gas company Oasis Petroleum filed an application for bankruptcy in a Houston court today. As a reason for its decision, the shale producer pointed to the inability to service debts due to low oil and gas prices.

As of June 30, 2020, the company's long-term debts amounted to $2.76 billion, and the volume of cash and cash equivalent amounted to only $77.4 million.

In 2020, a number of American shale companies filed similar bankruptcy applications, including Whiting Petroleum, Chesapeake Energy, Ultra Petroleum and Chaparral Energy.

In total, more than 200 energy companies have already gone bankrupt in the United States since 2015. These are the data of the law firm Haynes & Boone, cited by Bloomberg.

Devon Energy and WPX Energy shale merger

In September 2020, American oil and gas companies Devon Energy and WPX Energy Inc. agreed on a merger that will form one of the largest shale producers in the United States worth about $12 billion. Read more here.

656 million barrels of oil in government storage facilities

The maximum volume of the strategic oil reserve for USA 2020 is 714 million barrels.

As of July 2020, four salt storage facilities in Texas and Louisiana contain about 656 million barrels of oil. The American Oil Reserve is the world's largest owned by the government.

American oil producers from April to July 2020 delivered more than 21 million barrels of oil for storage in the state strategic reserve. This follows from the written opening remarks released on Tuesday by United States Secretary of power Dan Brouillette to a hearing in one of the subcommittee committees of the House of Representatives Committee on power and Commerce.

"Following the order of US President Donald Trump, we have opened a strategic oil reserve to store surplus oil owned by American producers. I am pleased to announce that the supply of 21.3 million barrels of crude oil to the strategic oil reserve has been completed, which represents a positive signal for the crude oil market, "Brouillette said.

In early April, amid falling oil prices, Trump said that the US government would allow the country's private oil producers to temporarily store their products in the state strategic reserve for sale at higher prices in the future. Later it was reported that the private sector signed contracts with the US government for storage in the strategic reserve of about 23 million barrels of oil.

Chesapeake Energy Bankruptcy

In June 2020, Chesapeake Energy, one of the pioneers of the US shale industry, filed for bankruptcy and asked for protection to restructure debt.

In the US, 17 shale oil producers went bankrupt

A number of shale oil companies in the United States are under significant pressure due to the growing economic crisis.

By the end of May, 17 manufacturers initiated bankruptcy proceedings in 2020. Their total debt totals over $14 billion.

By the end of 2020, bankrupt companies are expected to increase to 73.

The number of oil and gas rigs in the United States has dropped to a minimum in 80 years

On May 8, 2020, the American oilfield service company Baker Hughes published data according to which the number of oil and gas rigs in operation in the United States decreased to the smallest value in the last 80 years.

In April 2020, the number of installations decreased by 206 units (by 26.7%), amounting to 566, on an annualized basis, the figure decreased by 446 units. Since the beginning of the year, the figure has decreased by 225 installations.

Unprecedented problems began against the backdrop of the coronavirus pandemic, which led to an economic crisis and a radical decrease in fuel demand. Fuel demand declined by about 30% in April 2020, and companies began cutting costs sharply, laying off thousands of workers and closing production to offset the world's oil glut. Consumption has risen somewhat over the past couple of weeks, but an oversupply is expected to last for months, if not years, according to a report Baker Hughes released on May 8, 2020.

The decline in the number of rigs was already ahead of the decline in 2015-2016, when at its peak negative dynamics in the United States reached 53-54%. The bottom of the cuts has not yet been reached, but record low rates of decline in both absolute and percentage terms have already been passed, experts are sure. Oil production in the United States since the beginning of March has already fallen by 1.2 million barrels per day, the drop in raw material production was about 9.2% in April.

By the  end of 2020, the number of rigs in operation in the United States will halve to  200, Raymond James analysts predict.^[4] 

The beginning of the bankruptcy of oil companies

In early April 2020, oil companies began to go bankrupt in the United States due to the collapse of raw material prices. Whiting Petroleum, which develops shale oil fields in North Dakota, has filed a lawsuit for protection from creditors, offering them to convert $2.2 billion in debt into 97% of its shares, which actually means it is impossible to fulfill its obligations. Read more here.

2019

US is a major energy supplier to the EU

Shale oil boom weakens

As of September 2019, the boom in shale oil production is weakening, despite the fact that at this time, after attacks on Saudi Arabian oil facilities, this sector is more important for the global market than ever before, writes The Wall Street Journal.

According to power engineering specialists USA the ministry, oil production in the country in the six months of 2019 increased by less than 1%, while a year earlier the growth was about 7%.

Moreover, if a few years ago, when shale oil production fell, this was associated with a decrease in world prices, then this year the reduction in production is due to key operational problems. For example, experts note that production volumes are lower than expected due to the too close location of the wells to each other. In addition, it has become apparent that attractive shale assets are ending faster than expected.

The identified problems show that the advantage due to technological and engineering breakthroughs, which allowed shale companies to produce record volumes of oil and gas, is gradually fading away, the newspaper writes.

According to the forecast of the US Department of Energy, oil production in the country in 2019 will average 12.2 million barrels per day (b/s), compared with 11 million b/d a year earlier. In 2018, production increased from 10 million bpd in January to 12 million bpd in December, and now activity in the sector is slowing down.

"We are approaching peak production and we are close to peak physical production in these fields," notes Evercore ISI Managing Director James West.

Shale oil production in the United States as of September 2019 is about 8 million bpd, which corresponds to about 10% of global oil production and provides serious support to the global market, especially at moments of increased geopolitical tension, provoking jumps in oil prices.

Some experts remain confident that the shale oil market still has many years of growth ahead of it. Rystad Energy estimates that shale oil production will peak at 14.5 million bpd around 2030. The trajectory of production growth, according to experts, can change factors such as rising oil prices and the consolidation of the shale market.

An increase in the area of ​ ​ shale areas at the disposal of large oil companies, including Exxon Mobil and Chevron, may contribute to maintaining the trend towards production growth. These companies have already become leaders among producers of the Permian Basin and New Mexico in terms of production volumes.

Meanwhile, small and medium-sized producers are forced to reduce production, choosing to increase profitability of operations, amid weakening support for the sector from Wall Street and maintaining prices near $60 per barrel. Under such conditions, companies can no longer drill new wells as often as before.

IHS Markit experts note that even a steady rise in oil prices will have a limited impact on the shale market.

According to IHS estimates, shale oil production in the United States will increase by 480 thousand b/d in 2020 at an oil price of $62 per barrel. An increase in oil prices by $10 per barrel will lead to an increase in production by only 200 thousand b/d - this is significantly weaker growth than in 2018.

2018

US comes out on top in oil production

The United States became the second oil producer in the world

The United States increased oil production by 1.34 million barrels per day compared to March last year and became the second country in the world in oil production after Russia, overtaking Saudi Arabia, according to a report by the International Energy Agency (IEA) (data from April 2018^[5].

According to the IEA, Russia produces 11.35 million barrels per day, and Saudi Arabia - 9.92 million barrels. In March 2018, the United States produced 9.96 million barrels per day. The United States will continue to increase oil production, according to the IEA report, but transport restrictions may become an obstacle to this. At the same time, oil consumption in the United States in January increased by only 1.23 million barrels per day compared to January last year. The agency does not provide data for March.

The growth in US production may fully compensate for the growth in global oil consumption in 2018. The IEA predicts that in October - December 2018, the average daily oil consumption in the world may exceed 100 million barrels. According to the results of the first quarter of this year, it amounted to 98.1 million barrels per day.

The agency at the beginning of the year gave a forecast that in 2018 the leader in oil production will be replaced, it will be the United States, which will overtake Russia. But the agency did not give specific figures, as well as deadlines. Now production in the United States is kept at long-term peaks, in November last year it exceeded the 1970 record (10.044 million barrels per day) by 22,000 barrels.

Ninth country in the world in confirmed oil reserves

Oil: Net imports of 6 million bpd

The United States exports about 1.5 million barrels per day, in addition, they import 7.5 million barrels per day. This means that net oil imports are about 6 million barrels per day.

Such an interesting situation related to the import and export of American oil is due to the lack of sufficient capacity for the processing of oil coming from shale oil fields in the country. This oil is too "easy" for many American refineries.

Therefore, most of it is sent abroad to oil refineries with the possibility of its subsequent revision. The U.S. seeks to import heavier grades of oil that fit its overall refining capabilities ^[6] U.S. ^[6].

Petroleum products: net exports of 2 million barrels per day

The U.S. has more processing capacity than it needs for domestic consumption of petroleum products like gasoline, diesel, jet fuel and fuel oil. Some of these capacities have long been used to produce such products for export - for more than 30 years.

The EIA reports 4.5 million barrels per day of these products shipped abroad in four weeks as of February 23, 2018. However, the information is somewhat exaggerated, as this indicator includes a mysterious category called "Other Oil," which consists mainly of products such as ethane, propane and butane, which are simply not part of the oil production stream.

If we subtract this data, we will get about 3 million barrels per day, which are compensated by the import of the same products with a volume of about 1 million barrels per day. Thus, the net export of petroleum products is approximately 2 million barrels per day.

The main ways to trade gas in the world. Card

2017: Gas exports 3.17 trillion, imports - 3.04 trillion cubic feet

In 2017, the United States exported 3.17 trillion cubic meters. feet of gas and imported 3.04 trillion cubic meters. feet. Today, America is hardly the main force in the natural gas export market. Nevertheless, there are those who claim that it will become thanks to the future growth of natural gas production in the United States. This includes the EIA.

However, the EIA's report on long-term forecasts is dire. With regard to natural gas production in the United States, a private study based on actual data on natural gas production suggests that production volumes in 2050 will be only a fraction of the volumes noted today.

Natural gas deposits in shale fields are the only growing production, and four of the six main types of shale gas are already in decline, a study shows. It's hard to see how such trends could lead to significant growth in U.S. natural gas production through 2050.

2010: The Slate Revolution

Main article: Shale gas

1937

California, 1937]]

1931

1928

See also

• Oil and gas production
• Oil production in Russia
• US economy

Notes