Saudi Arabia becomes largest oil producer
By Nigar Abbasova
Saudi Arabia, which possesses almost one-fifth of the world’s proven oil reserves, has regained the position of the world’s top oil producer by lefting the U.S. behind for the first time since 2014, the International Energy Agency (IEA) reported.
The country has increased its output by 400,000 barrels per day (bpd) since May 2016 and reached the level of 10.6 million bpd in August, while U.S. oil output decreased by 460,000 bpd in the reported period.
U.S. oil production amounted to approximately 8.5 million bpd in August 2016, according to the U.S. Energy Department. Reduced number of drilling rigs in the country is considered to be one of the main reasons for a decrease in the volume of oil output. The number of rigs dropped to a record-low figure of 404 in May, 2016, but increased up to 508 in early September.
Meanwhile, the kingdom’s Energy Minister Khalid Al-Falih earlier said that the country will not boost its oil output ahead of OPEC’s informal Algeria meeting, which is scheduled for September 26-28, underlining that Saudi Arabia sees no need to reach its maximum capacity in the near future.
EIA made a series of gloomy predictions on demand growth that pointed that the balance in the market will be reached later than expected.
The review said that non-OPEC states faced the biggest damage from the falling oil prices. Output reduction in non-cartel countries has amounted to 1.4 million bpd since 2014, while the biggest portion of reduction fell to a share of the U.S., which is considered to be a locomotive for the growth of oil production in non-OPEC countries.
The average price of Brent oil grade has decreased by some 48 percent since June 2014, while WTI crude recorded a decrease of about 58 percent.
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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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