IEA: US Will Be Able to Overtake Russia in Oil Exports by 2024
HUSTON, TEXAS – March 12, 2019
By 2024, the United States may become one of the largest oil exporters in the world, surpassing Russia and coming close to such leaders as Saudi Arabia, predicts the International Energy Agency (IEA).
The US will continue to pump more and more crude, until it becomes a net oil exporter in 2021 and steps on the heels of Saudi Arabia in world markets, the International Energy Agency (IEA) predicts in its annual Oil Outlook report.
This evolution "will strengthen security in the world oil market," by increasing supply options for consumer countries, particularly in Asia, the IEA states in the report covering the period 2019-2024.
The shale hydrocarbon revolution in the US has turned this traditionally black gold importing country into one of the world's main oil producers.
The US showed an increase in exports in 2018, when the production of liquid hydrocarbons increased by 2.2 million barrels per day. The US will become net exporters of oil and petroleum products in 2021.
If all export projects are launched, the US will be able to export up to 8.4 million barrels of oil per day by 2024.
This new situation altered world oil markets, resulting in an overabundance of supply and the consequent fall in crude oil prices in mid-2014, from which the sector is still struggling to recover.
"It is an extraordinary time for the oil industry, in a context in which geopolitics becomes a more important factor in markets and the world economy slows down. Wherever you look, new actors emerge and past certainties fade", noted Fatih Birol, executive director of the AIE.
By 2024, the US will continue to feed 70% of the global growth in oil production capacity, with an additional 4 million barrels per day (mbd), according to the IEA.
Globally, production capacity will increase by 5.9 million barrels per day by 2024, despite an expected setback from Iran, due to US sanctions, and Venezuela, plunged into a serious political and economic crisis.
Another American giant, Brazil, and Norway will also increase their crude oil exports over the next five years, and will contribute to modify "in an extraordinary way" the global geography of oil, estimates the IEA, which defends the interests of consumer countries.
In total, the production of non-member countries of the Organization of the Petroleum Exporting Countries (OPEC), will shoot up from 6.1 million barrels a day to 68.7 million barrels a day in 2024.
The IEA, however, predicts that cartel production will decrease between 2019 and 2020, before experiencing "moderate" growth of up to 32 million barrels a day in 2024.
Today, oil prices show moderate growth. Brent supplies in May rose by $0.29 to $66.03 per barrel. A similar growth was demonstrated by WTI oil supplies in April, adding $0.28 to hit $56.35 per barrel.
As to the demand level, a there is no forecast for a "peak" according to the agency, which predicts that China and India will make up 44% of world growth, up to +7.1 million barrels a day in the period analyzed, to reach a total consumption of 106.4 million barrels a day in 2024 , compared to 99.2 last year.
Consumption will be driven mainly by the petrochemical industry, with 50 new projects to be launched before 2024, and air transport, especially in Asia. Conversely, the increase in demand for fuel will slow down until it reaches a rate of less than 1% per year.