BP has released its annual energy outlook in which it has suggested that the oil producing states in the Middle East will lose their dominance of the global oil market and even begin to struggle as Russia and South America begin to develop their huge shale oil resources and replicate the US shale boom.
This increased competition will coincide with growing domestic demand in countries such as Saudi Arabia that will reduce the volume of oil available for export to the world market. BP predicts that energy production in the Middle East will grow by 37% by 2015, but that consumption will grow by 77%. This will reduce the oil export capacity to just 66% of production volume, down from a current 72%. Governments in the region, who have historically relied heavily on oil export revenues, will begin to feel pressure as those revenues inevitably begin to fall.
BP wrote that “the Middle East will surpass the former Soviet Union as the most energy-intensive region in the world. The region is expected to become the largest consumer of liquids per capita, surpassing North America.
By 2035, the region will consume over three times the liquids per person than the global average.”
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The energy outlook notes that shale oil production growth will eventually make the US energy self-sufficient by 2035, with the BP’s chief economist Christof Ruhl adding that “the second-biggest coming in over time is Russia and then South America, and in South America Colombia and Argentina.”
This prediction by BP is in stark contrast to many other institutions, such as OPEC who has claimed that shale oil production will never reach the same levels outside of the US.
BP claim that world demand for crude oil will rise to 109 million barrels a day by 2035, and increase of 19 million barrels, and led by growth in China, India, and the Middle East.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com