BOOM: US shale surge sinks demand for Saudi petrol

Saudi Arabia is the second-largest petroleum exporter to the US,
but as domestic production increases in America, less is needed
from abroad.

The shale oil boom in the US began in 2008 and has increased US
crude output by 60 percent. In 2012, the United States became a
net exporter of liquefied petroleum gases for the first time.

Between January and March 2014, Saudi Arabia exported an average
of 1.5 million barrels per day to the US.

Saudi Arabia is the largest exporter of petroleum liquids in the
world and is home to the world’s largest proven crude oil
reserves, 16 percent of the world’s total.

Even though the US is poised to become the petroleum king,
Americans won’t notice a big difference at the pump. Gas prices
on average in the US are $3.34 per gallon whereas in equally
oil-rich Saudi Arabia its $0.78 per gallon.

The economy of Saudi Arabia is dependent on petroleum exports,
which accounted for 85 percent of export revenues in 2013,
according to an OPEC study. Oil and gas represent 68 percent of
Russia’s total exports.

However, in terms of crude oil production, Russia is still the
world’s leader with 10.1 million barrels per day, with Saudi
Arabia coming in second with 9.7 million barrels per day. The IEA
says the US could catch up with Saudi Arabia and Russia in crude
production by the end of the decade, but still hasn’t broken the
9 million barrel per day benchmark.

Production in Russia has fallen in recent months, and could be
hit further in the wake of sanctions, which will deprive Russian
companies of EU and US partners in Arctic, deep-sea, and shale
projects. A quarter of Russia’s total oil production depends on
shale.