US set to overtake Saudi Arabia and Russia as world's biggest oil producer
A report from the International Energy Agency (IEA) predicts that the US will leap-frog Saudi Arabia and Russia over the next 12 months to become the world's biggest producer of oil.
"This year promises to be a record-setting one for the US," the IEA said in its report published Friday.
"Relentless growth should see the US hit historic highs above 10 million barrels a day (in production), overtaking Saudi Arabia and rivaling Russia during the course of 2018, provided OPEC and non-OPEC restraints remain in place."
US shale companies have been buoyed by a recent rise in oil prices, which has seen the cost of the barrel to rise from lows of the mid $20s in 2016 to $70.
Production cuts by OPEC members and non-OPEC states helped prices stabilise over the past two years with further restrictions planned to eat into a backlog of supplies.
This, energy analysts, believed would see prices rise further in 2018 but the low costs have also been a boost for US crude oil producers.
These were blamed for the initial oversupply and many of the smaller producers were predicted to go bust in the age of cheap oil. Some did fold or put production on hold but recent highs mean that shale companies are going back online.
The IEA predicts a "wave of new production" from the US, which could unsettle the market and be a big hit for oil-producing states such as Saudi Arabia who might have believed they were on the road to recovery.
"What we are trying to understand is the responsiveness of the US shale producers. And because of the dynamism of the industry, the innovation and the vast number of players in that space… to some extent, we are in unchartered waters," Neil Atkinson, head of the oil industry and markets division at the IEA, told CNBC.
US crude oil production is at its highest in 50 years with companies pumping out nearly 10 million barrels a day. The IEA predicts output to rise to 10.4 million in 2018, while Saudi Arabia produces just under 10 million a year.