US seen dominating oil market after biggest boom
The supply surge from US shale oil and gas will beat the biggest gains seen in the history of the industry, the International Energy Agency (IEA) predicted.
By 2025, the growth in American oil production will equal that achieved by Saudi Arabia at the height of its expansion, and increases in natural gas will surpass those of the former Soviet Union, the agency said in its annual World Energy Outlook.
The boom will turn the US, still among the biggest oil importers, into a net exporter of fossil fuels.
“The implications of the shale revolution for international markets and energy security have been profound,” said the Paris-based International Energy Agency, which advises most of the world’s major economies on energy policy.
US drillers have “weathered the turbulent period of lower oil prices since 2014 with remarkable fortitude”.
While oil prices have recovered to a two-year high above $60 a barrel, they’re still about half the level traded earlier this decade, as the global market struggles to absorb the scale of the US bonanza.
It’s taken the Organization of Petroleum Exporting Countries (Opec) and Russia almost 11 months of production cuts to clear up some of the oversupply.
“The US will be undisputed leader of global oil and gas markets for decades to come,” International Energy Agency executive director Fatih Birol said Tuesday in an interview with Bloomberg Television. “In terms of oil, big growth coming from shale oil, and as such there’ll be a big difference between the US and other producers.”
The agency raised estimates for the amount of shale oil that can be technically recovered by about 30% to 105 billion barrels.
Forecasts for shale-oil output in 2025 were bolstered by 34% to 9 million barrels a day.
US shale “has emerged from its trial-by-fire as a leaner and hungrier version of its former self, remarkably resilient and reacting to any sign of higher prices caused by Opec’s return to active market management,” the IEA said.