Desmond Davies, London Bureau Chief
London, March 14, GNA – The US will become the world’s second major oil exporting country by 2024, overtaking Russia and closing in on Saudi Arabia, the top oil exporter, according to the Paris-based International Energy Agency (IEA).
In its latest report on the sector, Oil 2019, the IEA said the US was driving global oil growth over the next five years because of the “remarkable strength of its shale industry, triggering a rapid transformation of world oil markets”.
The IEA said America’s transformation “into a major exporter within less than a decade is unprecedented”.
“It is because of the ability of the US shale industry to respond quickly to price signals by ramping up production,” the IEA added.
The US will account for 70 per cent of the total increase in global capacity up to 2024, adding four million barrels a day (b/d), having recorded a growth of 2.2 million b/d in 2018, according to the IEA.
“The second wave of the US shale revolution is coming,” said Dr Fatih Birol, the IEA’s Executive Director.
“It will see the United States account for 70 per cent of the rise in global oil production and some 75 per cent of the expansion in LNG [liquified natural gas] trade over the next five years.
“This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy.”
The IEA report said America’s shale revolution was also changing things for refiners.
It added that these barrels were generally lighter and sweeter than the average crude slate, which meant they required less complex refining processes to turn them into final products.
“These are extraordinary times for the oil industry as geopolitics become a bigger factor in the markets and the global economy is slowing down,” said Dr Birol.
“Everywhere we look, new actors are emerging and past certainties are fading.
“This is the case in both the upstream and the downstream sector.
“And it’s particularly true for the United States, by far the standout champion of global supply growth,” he added.
Although global oil demand appears set to reduce over the next five years because of a slow down in China, the IEA is forecasting annual increases of an average of 1.2 million b/d up to 2024.
“Still, the IEA continues to see no peak in oil demand, as petrochemicals and jet fuel remain the key drivers of growth, particularly in the United States and Asia, more than offsetting a slowdown in gasoline because of efficiency gains and electric cars,” according to the report.
The IEA noted, however: “Global oil markets are going through a period of extraordinary change, with long-lasting implications on energy security and market balances throughout our forecast period to 2024.
“The United States is increasingly leading the expansion in global oil supplies, with significant growth also seen among other non-OPEC [Organisation of the Petroleum Exporting Countries] producers, including Brazil, Norway and new producer Guyana.”
Political and economic problems in Iran, Libya and Venezuela, though, have led to losses within OPEC.
“The implications of these developments on energy security are significant and could have lasting consequences,” the IEA said.
“In the longer term, security of supply is linked to upstream investment.
“Preliminary investment plans by major international oil companies indicate that upstream investment is set to rise in 2019 for the third straight year.
“For the first time since the 2015 downturn, investment in conventional assets could increase faster than for the shale industry,” the IEA report added.