US Oil Production Heads To All-Time High

As the Trump Administration opens the way for additional oil drilling, the US is already on track to have a record year of oil production. It will set a record for the third consecutive year.

Next year, the string of records may end. According to Semafor, “But producers have reduced capital investment, the best drilling sites have already been developed, and labor and materials costs are up, leading to the first slowdown without an external crisis in two decades.”

What matters just as much is whether the world has reached peak oil consumption. There is reason to think it has. There is also reason to believe that AI energy needs will lead to increased demand for several years. 

The use of petroleum in electricity supply in the US is low. That is an argument for oil production based on AI demand unrealistic. It is better to look at oil demand outside the US. The EIA showed America exported crude to 173 countries and three territories at the rate of 10.15 barrels a day. The same source shows that US oil exports reached a record last year. 

Europe Demand

The EIA reports, “U.S. crude oil exports in 2024 surpassed the previous record set in 2023, exceeding an annual average of 4.1 million barrels per day (b/d).” In 2010, that figure was close to zero. The No.1 destination for this oil was Europe.

The EU plans to increase its imports of oil and gas. To some extent this is because of pressure from President Trump. It is also due to cutting energy supplied by Russia.

Based on the geopolitical situation, the US may need to increase crude oil production for at least several more years.

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