U.S. shale oil and gas production is set to grow at a record-breaking rate over the next eight years, the International Energy Agency said in its latest World Energy Outlook. The authority forecast that between 2010 and 2025, U.S. shale oil production will rise by a stunning 8 million bpd – a growth rate that beats Saudi Arabia’s oil production growth at its highest and the Soviet Union’s growth in natural gas production.
This production growth rate, the IEA went on, will turn the United States from a net importer of oil into a net exporter by 2025. It will also become the world’s largest LNG exporter by that year. Natural gas production for the period between 2008 and 2023 will increase by 630 billion cu m.
All in all, the rise in U.S. oil production will account for 80 percent of the global oil production increase by 2025, and this production increase will match an increase in demand. 2025 will mark the peak of oil demand, if the IEA’s projections are accurate. From then on, demand decline consistently, pressured by fuel efficiency and alternatives to internal combustion engines.
Yet the dramatic changes in the market that accounts for the biggest chunk of oil demand will be offset by developments in other markets, the IEA says. The authority’s forecast is pretty much identical to Wood Mac’s: petrochemicals will spearhead oil demand growth in the long term, followed by fuel demand for trucks, aircraft, and ships.
Meanwhile, U.S. shale oil production will reach a plateau in the late 2020s and the global market will return to a greater dependence on Middle Eastern oil. However, the IEA warns that there are new resources of up to 670 billion barrels of crude that need investments to be developed until 2040, to compensate for existing field depletion.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Did Venezuela Just Default?
- OPEC Sees Oil Demand Soaring In 2018
- Oil Prices Nosedive On Bearish IEA Report