Permian power: How Texas has U.S. close to passing Saudi Arabia and Russia in oil production

With the help of Texas and the Permian Basin, the U.S. is playing a more prominent role in global crude oil production.

A decade ago, the U.S. was a distant No. 3 in oil production. It's still at three, but now it's just barely behind Saudi Arabia and Russia. And it's poised to take over the top spot.

Growing U.S. production has kept a lid on OPEC efforts to push oil prices higher with production cuts. U.S. oil production is expected to continue moving the global oil market in ways few others can.

Texas dominates the oil market

The Lone Star State produces three times more crude oil than its closest competitor.

"Our base estimate is that Texas accounts for three-quarters of U.S. growth next year. We're looking at 750,000 barrels of new production in 2018 out of the Permian Basin. When you consider that demand growth for crude globally is going to be [an additional] 1.3 million barrels a day ... you can't ignore the role Texas is playing."

Texas oil in a wild upswing

The expansion of fracking in the Oil Patch fueled the boom in Texas and the Permian Basin.

International crude oil production

Experts project that the U.S. could pass Russia and Saudi Arabia as the world's top oil producer as soon as this year. A decade ago, the U.S. was in the second tier of the world's oil producers.

"What these good people have been able to do out west and in other places is produce [crude oil] even at prices in the $40s. ... So long as we stay where we are right now — a little higher or a little lower — I think the projections are likely to be borne out."

Permian dominates

The U.S. is projected to increase oil production by more than 3 million

"It's difficult to see oil prices go much higher while the U.S. continues to cover the world's increasing demand for crude almost single-handedly. The International Energy Agency is forecasting that the U.S. will account for 80 percent of the world demand growth in the next three years."

SOURCES: U.S. Energy Information Administration; IHS Markit; DMN research