• US Oil Reserves Overtake Saudi and Russian Supply

Fuel for Thought

US Oil Reserves Overtake Saudi and Russian Supply

Jul 24 2016

Despite showing signs of slowing down, new research has revealed that for the first time, the USA is sitting on more oil than Saudi Arabia and Russia. It’s the first time the States has surpassed the world’s biggest exporting nations, with Rystad Energy estimating that the nation is home to 264 billion barrels of recoverable oil.

Factoring in the value of existing fields, as well as recent discoveries and unexplored areas, the figure put forward by in-house analysts exceeds both Saudi Arabia’s 212 billion in reserves, and Russia’s 256 billion.

A global glut

Not only did the Oslo-based group estimate reserves for the USA, Saudi Arabia and Russia, but they also took a calculated guess at total global oil reserves. Analysing three years’ worth of data from more than 60,000 fields across the globe, Rystad Energy estimates that the figure tops 2.1 trillion barrels. This is a huge 70 times more than the current yearly production rate of around 30 billion barrels.

The USA’s shale revolution

Whether or not production outlook spikes or declines depends on a series of factors. One of the biggest variables is whether or not hydraulic fracturing continues to shake up the oil and gas landscape. In the past, conventional oil producers such as such as Saudi Arabia have relied on readily available recoverable reserves as a source of global economic power. This has proven to be particularly useful when it comes to sway with oil guzzling nations like the US. However, over the past few years hydraulic fracturing has disrupted this relationship, and helped the US become more energy independent.

Thanks to recent discoveries in Texas and New Mexico, the USA has now caught up, and overtaken its Saudi and Russian counterparts. According to Rystad Energy data, these unconventional shale oil sites account for more than 50% of the USA’s remaining oil reserves, with Texas alone sitting on more than 60 billion barrels.

Are the figures realistic?

While the USA may boast a lucrative stash of oil, recoverability and cost of production are both major factors. For this reason, some analysts assert that the USA may not be as ‘rich’ as Rystad Energy data suggests.

Richard Mallinson of London-based consultancy Energy Aspects explains, “Reserves numbers matter but lots of other factors also determine short and long term returns from what the oil companies and nations hold. The rise in prominence of the US doesn’t diminish the role of Saudi Arabia or Russia, which have some of the cheapest to produce oil in the world.”

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