Is oil production exceeding imports in the near future? Well, there are many factors that are being taken into consideration. One of the major factors deals with knowing the major sources and consumers. The major energy sources in the United States are petroleum (oil), natural gas, coal, nuclear, and renewable energy. The major users are residential and commercial buildings, industry, transportation, and electric power generators.
For the first time since 1995, the United States production has exceeded its imports. The U.S. Energy Information Administration, the research arm of the Energy Department, said domestic crude production will be 2 million barrels a day higher than imports at the end of 2014, as oil from outside the U.S. is forecast to drop late in that year. During 2012, The United States consumed 18.6 barrels per day of petroleum products, making them the largest consumer. However, the States only imported 11.0 barrels per day of crude oil and refined petroleum products. About 29 percent of the crude oil imports came from the Persian Gulf countries of Bahrain, Iraq, Kuwait, Qatar, and Saudi Arabia.
In addition, the outlook report for March 2013 projects that crude oil production will increase from an average of 6.5 million barrels a day in 2012 to 7.3 million barrels a day in 2013. However, the consumption has fallen by 500,000 bbl/d in 2012, and will continue to decline as time goes on.
Recently, Production is being cut in order to keep crude oil prices at a reasonable level. This past April the Brent trade classification dropped to less than $100 per barrel for the first time since last July. The OPEC (Organization of Petroleum Exporting Countries) basket price, which represents the export grades, is less than $100 as well. Ali Aissaoui, a consultant at the Arab Petroleum Investments Corp., said that Saudi Arabia needs prices to be around $94 per barrel to keep its federal budget in check. EIA (Energy Information Administration) says that “Most of the 2013 decline comes from Saudi Arabia in response to non-OPEC supply growth.” According to the Organization of Petroleum Exporting Countries, Saudi Arabia cut production heavily in 2012, from 9.9 MMbl/d to 9.0 MMbl/d. EIA states that, by 2014, there will be a reduction in the cost of transporting crude oil to refiners, which will be reflected in Brent’s falling price differential. The Administration also adds that “We expect them (U.S. consumption) to fall to 32 percent in 2014, which would be the lowest level since 1985.”