Shale industry leads US to dominate global oil supply growth
The latest annual report from the International Energy Agency (IEA) predicts that in the next five years, the
It is the culmination of less than 10 years of shift, motivated by the shale industry’s response to price signals in the market. As they ramped up production, the U.S. has come to account for 70 percent of the world’s total capacity increase. Brazil, Norway and Guyana have also seen significant growth in recent years, but the United States has been a standalone in terms of what it has achieved.
“The second wave of the US shale revolution is coming,” IEA Executive Director Fatih Birol said. “It will see the United States account for 70% of the rise in global oil production and some 75 percent of the expansion in LNG trade over the next five years. This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy.”
In spite of this, oil demand growth is slowing, though it is expected to continue at an annual average increase of 1.2 mb/day through 2024. China’s demand is especially lagging, and production has faltered from once-major contributors Iran, Libya and Venezuela. With that said, the IEA notes there has not yet been a peak in oil demand, and it even offsets major slowdowns in gasoline.
The IEA expects that prices for gas oil could rise as demand from the marine sector increases, with the impending 2020 implementation of the International Maritime Organization’s new rules on bunker fuel quality.
