Create USB image of an installed OS

Sounds like cloning.

https://clonezilla.org/

However, this won’t always work without issues, because different machines have different stuff and when you save, for example, network settings then they probably won’t be correct for a different machine.

The safest way I would suggest for you is to create a good ol’ backup.

See Q5:

If you create a plain old backup, you can select what’s backed up, etc. Usually, it’s enough to save to your home folder. Sometimes you can even add /etc and similar. However, as previously mentioned, it’s important to not restore too much, when settings simply won’t match in a different environment.

If you, however, want to create a persistent Live USB Stick, i.e. a stateful OS put onto a portable storage medium, then you can do something as written in the following article.

https://www.howtogeek.com/howto/14912/create-a-persistent-bootable-ubuntu-usb-flash-drive/