The United States exported more oil than it imported for the first time in history last year, as production boomed in the Permian Basin of southeast New Mexico and West Texas.
In September 2019, the U.S. exported 89,000 barrels more of petroleum per day – including crude oil and petroleum products – than it imported, per data from the federal Energy Information Administration (EIA), for the first time since the EIA’s records began in 1973.
That marked a dramatic shift from a decade ago, records show, when the U.S. was importing 10 million more barrels per day than it exported.
The U.S. still imports more crude oil than it exports, but it exports more petroleum products than imports, resulting in net total petroleum exports, read the report.
The report pointed to increased domestic oil production from the reduction in U.S. imports of crude oil, with production rising from about 5.3 million barrels per day in 2009 to 12.1 million in 2019.
During that same period, imports dropped from an average of 9 million barrels per day to just 7 million in 2019.
Changing U.S. trade policies were also credited for the increase in exportation, per the report, as the U.S. lifted restrictions in 2015 on exporting crude oil produced domestically, which led to crude oil becoming the largest contributor to U.S. petroleum export growth.
Crude oil exports grew from 591,000 barrels per day in 2016 to 2.8 million barrels per day in 2019 through September.
Permian Basin driving growth
EIA records pointed to the Permian Basin as driving national oil production growth, which accounted for 63 percent of Texas’ oil production and 93 percent of production in New Mexico.
Production in the basin was forecast to average 4.4 million barrels per day in 2019, up about 920,000 from 2018’s average.
The growth meant Texas’ oil production increased by 1.1 million barrels per day, or 28 percent, between January 2018 and April 2019 and New Mexico’s rose by 345,000 barrels per day or 64 percent.
In total, the Permian’ month-to-month growth average 100,000 barrels per day for most of 2018, records show, with added pipeline capacity and other industrial efficiencies allowing the continued momentum.
Robert McEntyre, spokesman for the New Mexico Oil and Gas Association (NMOGA) said New Mexico’s production will continue to grow, making the state a leader in American energy production.
He said the state surpassed 900,000 barrels per day in 2019 and was approaching 1 million.
"This accomplishment for this country shows the strength of the Permian Basin and in places like New Mexico where investment and development has accelerated in recent years," McEntyre said. "As national oil and gas production increased, that's coming from a handful of shale basins, but mostly from New Mexico."
NMOGA Executive Director Ryan Flynn said governmental policies must support the industry’s growth toward establishing the energy independence for the U.S.
“With this kind of steady, upward movement we’re entering a new era in southeast New Mexico and the Permian, where production will remain at record highs as long policy remains stable,” he said.
Oil prices continue rise as tensions mount in the Middle East
The start of 2020 saw the price of domestic crude oil continue its rise into the low $60s, threatening to reach the mid $60s for the first time since September 2019, when the price of West Texas Intermediate closed at about $63 per barrel on Sept. 16, per data from Nasdaq.
As of Friday, WTI was trading at $63 per barrel, continuing its run in the $60s that began on Dec. 13.
More: Permian Basin oil production could slow in 2020, 2021, report shows, as oil prices stabilize
Some of the increasing value of U.S. oil was credited to tensions between the U.S. and Iraq teetering on the brink of war, read a report from Enverus.
The U.S. announced yesterday its forces assassinated Iranian Revolutionary Guard commander Qasem Soleimani, and Iran’s Supereme Leader Ali Khamenei vowed revenge.
"At the direction of the President, the U.S. military has taken decisive defensive action to protect U.S. personnel abroad by killing Qasem Soleimani, the head of the Iranian Revolutionary Guard Corps-Quds Force, a US-designated Foreign Terrorist Organization," read a tweet from the White House.
At the direction of the President, the U.S. military has taken decisive defensive action to protect U.S. personnel abroad by killing Qasem Soleimani, the head of the Iranian Revolutionary Guard Corps-Quds Force, a US-designated Foreign Terrorist Organization.— The White House (@WhiteHouse) January 3, 2020
This instability in the Middle East and hostilities between the U.s. and Iran – a top-oil-producing nation – led to the market reacting in support of U.S. oil, the report read.
“The question at this point is not whether the Iranians will retaliate, but how and where. Iraq is the most likely venue, as direct confrontation with US forces in the Strait of Hormuz would end badly for Iran,” read the report.
“While we can expect the number of attacks against US forces and interests in the country to increase, oil markets are watching to see if heightened instability leads to a major supply disruption as Iraq teeters on the edge.”