The shale boom has catapulted the U.S. energy industry to new heights: A new estimate shows that America is now the world’s No. 1 in oil reserves.
The independent estimate by Rystad Energy shows that the U.S. holds 264 billion barrels of recoverable oil from existing fields, discoveries and yet undiscovered fields. This beats out second-place Russia (256 billion barrels), Saudi Arabia (212 billion barrels) and Iran (143 billion barrels), according to the Norway-based oil and gas consultancy.
Just three years ago, the U.S. was behind Russia, Canada and Saudi Arabia, but discoveries in the Permian Basin of Texas and New Mexico have pushed America’s ranking ahead of those countries, Rystad analyst Per Magnus Nysveen explained in an interview with The Financial Times. Texas alone holds more than 60 billion barrels of shale oil, according to Rystad data. Hydraulic fracturing and other new technologies have helped the U.S. extract more oil in recent years.
Rystad, which analyzed 60,000 fields worldwide over a three-year period, estimates global crude oil reserves at 2.1 trillion barrels, 70 times the current annual production rate of 30 billion barrels.
Other data sources on global oil reserves, such as the BP Statistical Review, still show America trailing Saudi Arabia, Russia, Canada, Iraq, Venezuela and Kuwait. However, Rystad explains that these numbers are often based on “a diverse and opaque set of standards.”
Despite America’s vast reserves of recoverable oil, the cost of extracting that oil still allows lower-cost producers such as Saudi Arabia and Russia to secure a larger share of the global market. The Saudis and Russians are able to produce oil at less than $10 per barrel, a fourth of the cost of American oil.