Permian Basin production set to surpass all OPEC countries but Saudi Arabia

Fuel Fix:
Oil production from West Texas' booming Permian Basin will more than double from 2017 to 2023, soon surpassing the crude oil volumes of every OPEC nation except Saudi Arabia, according to a new report from the research and consulting firm IHS Markit.

Even with pipeline constraints and labor shortages in West Texas and New Mexico, IHS Markit still projects Permian production to surge from 2.5 million barrels a day last year to 5.4 million barrels daily by 2023.

And it's already well on its way. The Energy Department estimates the Permian already is up to about 3.3 million barrels daily in early June.

"In the past 24 months, production from just this one region — the Permian — has grown far more than any other entire country in world," said Daniel Yergin, IHS Markit vice chairman.

Both the Permian and the U.S. as a whole are currently producing oil at record rates. The U.S. recently surpassed the Saudis as the world's second-biggest oil producer after Russia.

In early June, the Energy Department said Wednesday the U.S. hit a record 10.9 million barrels of oil a day, while Russia increased to 11.1 million barrels daily. That means Russia is currently violating its quota to keep production below 11 million barrels as part of its accord with the Organization of the Petroleum Exporting Countries. However, both Russia and the Saudis have indicated they plan to roll back much of those quotas after the upcoming June 22 OPEC meeting.
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The Russians and the Saudis are increasing production to replace the lower numbers coming from Venezuela and Iran, both of whom have been hit with sanctions imposed by the Trump administration.  Venezuela has been suffering lower production also because of teh incompetence of the government management and losing assets as a result of arbitration awards to companies whose business they seized in the name of socialism.

Both Venezuela and Iran are likely to continue to have lower production unless there is a regime change and resulting change in policies.

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