While attacks on Saudi oil facilities over the weekend have sent U.S. petroleum prices surging, America remains less dependent than ever on Saudi oil.
A rise in shale oil production over the last decade catapulted the U.S. into the top spot for global oil production in 2018, according to the Energy Information Administration. America produced 18% of the world's oil last year, compared with Saudi Arabia's 12%, Russia's 11% and Canada's 5%.
As a result, the United States produced more oil than it imported in 2018. Technological advancements in hydraulic fracturing, or fracking, have spurred the boom.
What's more, while Saudi Arabia remains the second-largest oil producer, the U.S. is taking less of it. Saudi oil represented about 9.1% of U.S. oil imports in 2018, down from 11.8% in 2008.
During that 10-year period, U.S. crude oil exports have increased 69-fold to 2 million barrels per day.
The U.S. imported 328.7 million barrels of oil from Saudi Arabia in 2018, an all-time low since the EIA began tracking the Saudi numbers in 1993 and about half of the peak in 2003.
That doesn't mean the U.S. can avoid an impact from the attacks in Saudi Arabia, however.
In June, refiners in California imported the most oil from Saudi Arabia at 246,000 barrels per day, while refiners in Texas imported 170,000, according to energy analytics firm RS Energy Group.
U.S. not insulated
"The U.S. imports less Saudi oil than it did in the past, thanks to a growing supply of home-grown barrels," Judith Dwarkin, chief economist at RS Energy, told USA TODAY in an email. "But this doesn’t insulate the U.S. from price shocks on the global market because the U.S. is connected to the global market."
Oil prices surged Monday following the weekend attack. The futures price of West Texas Intermediate – the U.S. benchmark – jumped 14% to $62.63 in afternoon trading as investors predicted that outages in Saudi output would generate a ripple effect in global crude markets.
That price surge means Americans could soon pay more at the pump for gasoline, which is tied closely to the price of oil.
The increase is "the strongest single-day move for oil in a generation," said CFRA Research oil analyst Stewart Glickman in a research note.
Bespoke Investment Group analyst George Pearkes noted that "big one-day spikes for oil are typically followed by near-term downside," meaning that the price could reverse course and head lower after the initial shock wears off.
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The weekend attacks zeroed in on critical infrastructure with devastating effect. The Abqaiq processing facility in eastern Saudi Arabia is the largest in the world, according to CFRA, while the Khurais oil field is the second-largest of its kind.
Given that the Saudi sites had excess production capacity and were thus capable of filling in the gap when other countries encounter obstacles, the outages represent an "extreme risk situation for oil," Mizuho Securities managing director Paul Sankey said in a research note. In other words, another incident could have an outsize impact.
Saudi output is expected to fall by more than 50% in the near term, according to CFRA.
If the Saudi facilities take more than a few weeks to come back online, the Organization of Petroleum Exporting Countries (OPEC) will likely suspend its ongoing production cuts to help alleviate the impact of the Saudi crisis, while the International Energy Agency "may need to release strategic oil stocks," wrote Bill Farren-Price, director of RS Energy Group.
In the U.S. on Sunday, President Donald Trump said he had authorized the release of oil from the U.S. strategic petroleum reserve.
The "worst-case scenario – with profound implications for the global economy – is a broader regional conflict that puts Gulf oil production, processing and transport in the crosshairs," Farren-Price said.
Regardless of how long it takes to get the facilities running again, "oil prices are now likely to bake in a much higher geopolitical risk premium that had been absent in much of 2019," Glickman said.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
This article originally appeared on USA TODAY: Saudi Arabia oil attack: Why US needs Saudi oil less than ever