United States Emerges as the Oil Giant: A New Era in Energy Dominance

In a groundbreaking revelation, the United States is set to enter 2024 as the world’s largest oil producer, surpassing all historical records. Jim Burkhard, Vice President and Head of Research for Oil Markets, Energy, and Mobility at S&P Global Commodity Insights, paints a compelling picture of this monumental shift in the latest oil markets analysis.

With an impressive total liquid production of 21.9 million barrels per day (b/d) in Q4 2023, the U.S. leads the charge, boasting 13.8 million b/d in crude and condensate. Burkhard points out that not only is the U.S. achieving this historic feat, but the volume of oil exports, encompassing crude oil, refined products, and natural gas liquids, rivals the total production of industry giants Saudi Arabia and Russia combined. Reflecting on the remarkable turnaround since 2008, when U.S. production hit a 62-year low and exports were non-existent, Burkhard highlights the nation’s transformative journey.

As the U.S. takes center stage in the oil market, Burkhard predicts a significant global shift. The 2024 outlook reveals that while global crude oil demand is expected to reach a record high, it will be comfortably met by the robust growth in supply. S&P Global Commodity Insights projects a non-OPEC+ liquids supply growth of 2.7 million b/d in 2024, surpassing the total demand growth of 1.6 million b/d.

The analysis indicates that the dynamic interplay between non-OPEC+ production growth and OPEC+ supply restraint establishes a new equilibrium for oil prices in 2024. Burkhard suggests that this “playing field” will likely keep oil prices within the $75-$100 per barrel range for Dated Brent. He emphasizes how OPEC+ supply management acts as a safeguard, preventing prices from plummeting below a specific floor while simultaneously enabling prices to remain high enough to support oil production growth outside the OPEC+ alliance.

However, Burkhard underscores the fluidity of the oil price landscape, cautioning that unforeseen developments could reshape the boundaries. He draws parallels between the current situation and historical shifts, pointing out that sustained high prices may exert pressure on OPEC+ to implement further production cuts. While such actions are often taken to stabilize prices, Burkhard notes the historical precedent of supply restraint leading to the challenge of lost market share.

The oil markets are on the brink of a transformative year, with the United States leading the charge as the foremost oil producer in history. As the global demand for crude oil reaches unprecedented heights, the delicate balance between supply growth and OPEC+ restraint sets the stage for a new era of energy dominance.

Quotes and Sources:

Jim Burkhard, Vice President and Head of Research for Oil Markets, Energy and Mobility, S&P Global Commodity Insights