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US will surpass Saudi Arabia, rival Russia's oil production in 2018

Saudi Arabia, January 20, 2018

The U.S. is anticipated to experience 'explosive growth' in oil production in 2018 and will surpass Saudi Arabia's output for the first time, according to the International Energy Agency's monthly oil bulletin.

“The big 2018 supply story is unfolding fast in the Americas,' the agency's report read Friday. “Explosive growth in the U.S. and substantial gains in Canada and Brazil will far outweigh potentially steep declines in Venezuela and Mexico.”

The U.S. is a contributing member of the global agency that tracks energy supply and demand trends.

The 'relentless growth' will see the U.S. reach a historic high of above 10 million barrels of oil production per day. The surge will both overtake Saudi Arabia and rival Russian oil production throughout 2018, the agency said.

The agency said the only caveat is that Organization of the Petroleum Exporting Countries and non-OPEC 'restraints remain in place,' according to the IEA's oil report. The restraints refer to an agreement between OPEC and non-OPEC nations, like Russia, to curtail production in order to drive up global oil prices.

The price of oil has been depressed for over two years due to an oil supply glut where production, in part due to the U.S. shale boom, has exceeded demand.

The glut has sent some OPEC member economies like Venezuela into turmoil. Even oil-rich Saudi Arabia saw its country's budget cut in half due to the price fall, forcing it to put in place a plan to diversify its economy away from petroleum.

OPEC members are expected to meet in Oman over the weekend to discuss progress on the oil production cuts. Oman is the largest non-OPEC oil producer in the Middle East. It will be the first time the country has hosted a ministerial OPEC meeting.