US monthly oil production outstrips imports for first time in 18 years

Milestone in the US march to self-sufficiency in energy

US crude oil production overtook imports for the first full month in 18 years in October, according to US government data, marking a milestone in the US march to self-sufficiency in energy.

Until it was matched by China earlier this year, America had been the world’s largest single importer of oil for several decades.

But in recent years its domestic oil industry has been revitalised as unconventional drilling techniques unlocked oil trapped in shale rock formations.

While the US is likely to remain an oil importer for the foreseeable future, policy makers have said the country’s shale boom is giving it more flexibility in international relations.

Jason Bordoff, a former senior White House energy official and now head of the Center on Global Energy Policy at Columbia University, said increased domestic production had made it easier for the US to impose sanctions against Iran’s nuclear programme.

“[This] is a notable milestone. Additional oil production has enhanced the US security position. It has been easier to pull Iranian oil out off the market, because the US has more than made up that production shortfall with our own production,” he said.

US crude oil output has increased 50 per cent since 2008, while imports have fallen about 20 per cent. In October, US crude production averaged 7.7m barrels a day, while imports were 7.6m b/d, according to data from the Energy Information Administration.

Surging domestic production has also revived the US refining sector, as domestic prices have fallen under the weight of production.

The export of crude oil from the US is tightly restricted by law, meaning that domestic prices can diverge sharply from global prices for long periods of time. On Tuesday benchmark US oil prices hit a four-month low of $92.86 per barrel, $13 per barrel below the global benchmark Brent.

The US has become a major exporter of oil products such as diesel, as refiners turn cheap crude into products that can be freely exported abroad.

The International Energy Agency, the think-tank backed by rich countries’ governments, predicted this week that the rapid growth of US oil production would peak around the end of the decade, once the most promising shale formations had been drilled.

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