U.S. oil and gas market size

Us oil and gas market analysis

During the forecast period, the compound annual growth rate of the US oil and gas market is expected to exceed 4%. In 2020, COVID-19 had an adverse impact on the market. The market has now reached pre-pandemic levels. In the medium term, factors such as lower drilling costs, new drilling and production technologies, and higher oil prices are likely to drive the market. On the other hand, the high volatility of crude oil, coupled with the large capital and operating expenses required for operations and increased investment in the renewable energy sector, could dampen the market. However, increased activity and oil production in the U.S. Permian Basin could create many opportunities for the U.S. oil and gas market.

The upstream sector is poised for significant growth

The United States, the world's largest economy, uses significantly more energy. The country has significant oil and gas reserves, which are being extracted to meet its needs. The United States became one of the world's largest crude oil producers in 2018 and will maintain its lead in 2021. It accounts for 18.5% of global crude oil production in 2021, or 16,585 thousand barrels per day. In February 2022, BP PLC announced the start of the Herschel expansion project in the Gulf of Mexico. Herschel is the first of four major projects to be delivered worldwide in 2022. The first phase of the project includes the development of a new subsea production system. At its peak, the first well is expected to add approximately 10,600 barrels of oil equivalent per day to the platform's total annual production. In December 2021, Conocophillips began production at the GMT-2 oil project in Alaska's National Petroleum Reserve. The project is expected to produce 30,000 barrels per day at its peak. The development cost of the project was $1.4 million. Therefore, the upstream segment is likely to see significant growth during the forecast period due to the above factors.

Invest in renewable energy to curb the market

The oil and gas industry is a significant contributor to emissions from oil production and consumption. To limit these emissions, the U.S. government is reducing its reliance on oil and gas and shifting its focus to building renewable energy to meet its needs. As of 2022, the United States has 351.67 GW of installed renewable energy capacity. The oil and gas industry's carbon footprint (emissions from operations and energy consumption) is at least 2.6 billion tons per year, compared to 37.1 billion tons from human activities. In February 2022, Imperial County, California, approved a lithium Valley development plan that includes geothermal energy production. Geothermal production in the county is likely to expand to between 1,500 MW and 3,000 MW over the next two decades, as an estimated 1,000-1,500 MW of additional power generation is available. In January 2022, the U.S. House of Representatives unveiled the 2022 American Competition Act, which aims to strengthen the country's supply chain and competitiveness, including $3 billion for solar manufacturing. As a result, the focus on renewable power generation and increased spending could dampen the U.S. oil and gas market.

Overview of the U.S. oil and gas industry

America's oil and gas markets are moderately fragmented. Some of the major players in the market (in no particular order) are Shell PLC, BP PLC, ExxonMobil Corporation, Chevron Corporation and TotalEnergies SE

U.S. oil and gas market news

March 2022: US President Joe Biden agrees to a landmark energy supply deal with the European Union. Under the deal, the United States is expected to increase trans-Atlantic gas shipments. The deal was important to reduce Russia's dependence on Ukraine after the war. January 2022: The Department of Energy announces the release of 13.4 million barrels of oil from the Strategic Petroleum Reserve. The release of the emergency oil reserve is aimed at responding to rising gasoline prices in the United States and low global oil supplies.

Market opportunities and future trends

United States oil and gas industry segmentation

Petroleum and natural gas means petroleum, natural gas and other related hydrocarbons or minerals, or any of them, and all other substances produced or extracted in connection with them. The U.S. oil and gas market is divided by industry into upstream, midstream, and downstream. The report provides crude oil production and consumption forecasts (thousands of barrels per day) and natural gas production and consumption forecasts (billion cubic feet per day).