Saudi Arabia tried to kill off the U.S. oil boom. Instead, it just made the industry more efficient.
The U.S. shale industry is “much leaner and fitter” following a massive slump in oil prices last year, according to the International Energy Agency.
“Not only is the [U.S.] rig count rising, but recent reports tell us that the productivity of shale activity has improved in leaps and bounds,” the IEA said in a new report released Thursday.
Crude oil prices hit a 13-year low around $26 a barrel last year due to excess supply in the market.
OPEC was behind the slump as the Saudi-led cartel insisted on pumping record amounts of oil to keep global prices down and put a squeeze on U.S. producers.
But crude prices have since doubled after OPEC agreed in late November to limit production. And so U.S. producers are getting back to work.
The IEA says American shale oil producers now have shorter drilling times and better production levels at their wells.
Industry research firm Wood Mackenzie recently predicted U.S. oil sector spending will grow by 23% to $61 billion this year as American companies capitalize on rising prices.
The oil slump in 2014 and 2015 led U.S. producers to slash over 51,000 jobs and reduce output.
U.S. firms have relatively high production costs so they feel the pressure more acutely when oil prices fall.
The IEA also predicts that Brazil and Canada will boost their output this year as long-planned oil projects come online. These two countries are also known to have relatively high production costs.
