The United States is on course to take over Saudi Arabia and even rival Russia as the world’s leading energy producer this year following a months-long price rally that has fueled a resurgence of the shale oil industry.
The explosive growth flies in the face of efforts by Saudi Arabia and its oil allies to squeeze the US shale drillers by keeping prices low.
As parts of that drive, Saudi Arabia has been flowing the market with oil since 2014 in an attempt to push higher-cost producers, particularly US shale, out of the market. Consequently, oil prices dropped to $40 a barrel in December of that year, down from more than $100 a barrel just four months previous.
Many US exploration and production companies, from Texas Permian Basin to the Bakken Formation in North Dakota, filed for bankruptcy.
However, low prices decimated the Saudi economy at a time when the kingdom needed to plow more money into its aging oil fields to stay competitive….