IEA forecast: US to become world’s largest oil producer


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(EM) The US will overtake Saudi Arabia to become the world’s top oil producer sometime around 2020, the International Energy Agency predicts

The jump will be made possible by the recent rebound in US oil and gas production, driven by technologies that unlock shale gas and tight oil resources, the IEA said in its latest World Energy Outlook.

The role of the US in global energy trade will change so much due to new technologies and the use of renewable energy that, after overtaking Saudi Arabia to become the biggest oil producer by 2020, it will become a net oil exporter around 2030, the IEA’s report also said.

It predicted that global energy demand will grow by more than one-third by 2035, with China, India and the Middle East accounting for 60% of the increase. By contrast, energy demand in the OECD countries “barely rises,” the report said, although it predicted “a pronounced shift away from oil, coal (and, in some countries, nuclear) towards natural gas and renewables.”

Oil demand is forecast to reach 99.7 million barrels a day in 2035 from 87.4 mb/d in 2011, while the average crude import price is likely to rise to $125 per barrel in year-2011 dollars in 2035. In nominal terms, the price of oil is likely to be $215 a barrel in 2035, the IEA’s report said.

The number of passenger cars is likely to double to 1.7 billion; the transport sector, which already accounts for over half of global oil consumption, is likely to increase its share; demand for road freight will also increase rapidly and it will be responsible for almost 40% of the increase in global oil demand, it added.

Natural gas will overtake oil to become the largest fuel in the energy mix in the US around the year 2030, according to the IEA report, due to “low prices and abundant supply.”

Demand for natural gas from China, India and the Middle east will be strong, as active policy support and regulatory reforms will push China’s consumption up to 545 billion cubic meters in 2035 from around 130 bcm currently.
Unconventional gas such as shale gas, tight gas and coal bed methane will account for nearly half of the increase in global gas production to 2035, the report said. Most of the increase will come from China, the US and Australia.

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