U.S. petroleum and natural gas production increased by 16% and by 12%, respectively, in 2018, according to data from the Energy Department's Energy Information Administration (EIA). The production totals established a new production record.

The U.S. passed Russia in 2011 to become the world's largest natural gas producer and Saudi Arabia in 2018 to become the world's largest petroleum producer. EIA said that the 2018 increase was one of the largest absolute petroleum and natural gas production increases from a single country in history.

For the U.S. and Russia, petroleum and natural gas production is almost evenly split; Saudi Arabia's production favors petroleum. Petroleum production includes several types of liquid fuels, including crude oil and lease condensate, natural gas plant liquids (NGPLs) and bitumen. The U.S. produced 28.7 quadrillion British thermal units (quads) of petroleum in 2018, which was composed of 80% crude oil and condensate and 20% NGPLs.

U.S. crude oil production increased by 17% in 2018, setting a record of nearly 11.0 million barrels per day (b/d), EIA said. Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth. The U.S. also produced 4.3 million b/d of NGPLs in 2018. NGPL production has more than doubled since 2008, when the market for NGPLs began to expand.

U.S. dry natural gas production increased by 12% in 2018 to 28.5 billion cubic feet per day (Bcf/d) reaching a new record high for the second year in a row. Ongoing growth in liquefied natural gas export capacity and the expanded ability to reach new markets have supported increases in U.S. natural gas production, EIA said.

Demand growth for LNG

Natural gas deliveries to U.S. facilities producing liquefied natural gas (LNG) for export set a monthly record in July, averaging 6.0 billion cubic feet per day (Bcf/d). That was roughly 7% of the total U.S. dry natural gas production. EIA said that during the first seven months of 2019, natural gas feedstock deliveries to LNG export facilities have been the fastest growing among all U.S. natural gas consumption sectors.

The U.S. has been exporting more natural gas than it imports on an annual basis since 2017. Source: Chad Teer from Coquitlam, France/Flickr.comThe U.S. has been exporting more natural gas than it imports on an annual basis since 2017. Source: Chad Teer from Coquitlam, France/Flickr.comThe U.S. has been exporting more natural gas than it imports on an annual basis since 2017. EIA said it expects that U.S. natural gas exports will continue to increase as new LNG facilities come online.

EIA estimates that U.S. LNG exports set records in June and July 2019 at 4.8 Bcf/d and 5.2 Bcf/d, respectively, based on tanker loadings data from Bloomberg. Natural gas feedstock deliveries to LNG export terminals averaged 5.5 Bcf/d in June and 6.0 Bcf/d in July, implying that about 15% of the natural gas feedstock sent to LNG facilities was used as fuel in the liquefaction process.

Russian production

Russia’s crude oil and natural gas production also reached record levels in 2018, encouraged by global demand. Russia exports most of the crude oil that it produces to European countries and to China. Since 2016, nearly 60% of Russia’s crude oil exports have gone to European member countries in the Organization for Economic Cooperation and Development (OECD).

Russia’s natural gas production increased by 7% in 2018, which exceeded its export growth. The Yamal liquefied natural gas (LNG) export facility, which loaded its first cargo in December 2017, can liquefy more than 16 million tons of natural gas annually and accounts for almost all of the recent growth in Russia’s LNG exports. Since 2000, more than 80% of Russia’s natural gas exports have been sent to Europe.

Saudi production

Saudi Arabia’s annual average crude oil production increased slightly in 2018, but remained lower than in 2016, when Saudi Arabia’s crude oil output reached a record high. Saudi Arabia’s crude oil production reached an all-time monthly high in November 2018 before the December 2018 agreement by the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts.

In addition to exporting and refining crude oil, EIA said that Saudi Arabia consumes crude oil directly for electricity generation, which makes its crude oil consumption highest in the summer when electricity demand for space cooling is relatively high. Since 2016, Saudi Arabia’s direct crude oil burn for electric power generation has decreased as a result of demand reductions from a partial withdrawal of power subsidies, greater use of residual fuel oil, and increased availability of domestic natural gas.

Crude oil exports account for about 60% of Saudi Arabia’s total economic output. China, along with Japan, South Korea, Taiwan and the U.S. remain critical markets for Saudi Arabia’s petroleum exports.