• 1 day PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 1 day Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 1 day Syrian Rebels Relinquish Control Of Major Gas Field
  • 1 day Schlumberger Warns Of Moderating Investment In North America
  • 1 day Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 1 day Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 2 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 2 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 2 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 3 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 4 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 4 days China To Take 5% Of Rosneft’s Output In New Deal
  • 4 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 5 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO
Alt Text

Aggressive OPEC Pushes Oil Prices Up

Oil prices are once again…

Alt Text

This Key Data Points At Strong U.S. Oil Demand

U.S. Gasoline prices haven’t risen…

Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

More Info

IEA: U.S. Soon To Be ‘Titan’ of Refined Petroleum Products

IEA: U.S. Soon To Be ‘Titan’ of Refined Petroleum Products

By the end of the decade, North America will become a “titan of unprecedented proportions” when it comes to exporting refined petroleum products, according to a new report from the International Energy Agency (IEA).

The IEA’s “Medium-Term Oil Market Report 2014” pays particular attention to the ongoing shale oil and gas revolution in the United States, where its transformative impact, the agency says, “cannot be emphasized enough.” The United States is now the world’s largest petroleum liquids producer, as well as the largest exporter of refined petroleum products -- a category that includes gasoline, kerosene and fuel oil. By 2020, the IEA projects the U.S. will be able to achieve net exports of 3.5 million barrels per day (bpd) of refined products.

However, this massive opportunity for America’s refiners, which have been fortunate for the glut of tight oil coming out of shale fields far and wide, could be short-lived. Only a few weeks ago, the IEA published a separate report that said that oil production from non-OPEC countries (where net growth has come almost exclusively from the United States) “starts to run out of steam in the 2020s.”

The IEA reiterated this position in its most recent oil market report, declaring a U.S. “production plateau may be in sight, including a rising percentage of supplies that require a higher breakeven price.”

Plateauing production in North Dakota and Texas would have enormous ramifications for oil markets globally, which are “tighter today than they were at the onset of the U.S. shale and tight oil boom,” the IEA says.

That’s because the influence of the Organization of Petroleum Exporting Countries (OPEC) has been on the wane. OPEC members have suffered from “above-ground” problems (i.e. political turmoil), which have slashed production. Iran and Libya have already seen their oil output levels cut back severely, and now Iraq is in a state of disintegration. Over the next five years, the production levels from Iran, Libya, and Iraq are intensely uncertain, to say the least.

Meeting global demand, which is expected to climb from 91.43 million barrels per day in 2013 to 99 million bpd in 2019, will obviously require an increase in production. The problem is that the 2.08 million bpd of increased production from OPEC is supposed to come entirely from Iraq.

If Iraq cannot meet expectations, the world will have to find oil elsewhere. As mentioned, the U.S. may be hitting a ceiling in terms of production over the next five to 10 years, so American shale may not be the answer.

Related Article: Iraq, oil markets, and the U.S. economy

If the world cannot rely upon OPEC or the U.S., that leaves hopes pinned on the shale revolution spreading to other countries, which the IEA says may actually occur sooner than expected. At the top of the list are Russia, Argentina, and Mexico. Russia recently signed cooperation agreements with several international oil companies to tap its rich shale reserves. Argentina made some tax reforms to make shale investment more attractive. And Mexico is in the midst of an historic liberalization campaign in its energy sector, which could lead to major oil companies drilling new wells on and offshore. Taken together, the IEA projects that non-U.S. shale oil could hit 650,000 bpd by 2019.

This would be a notable development, but not exactly a game changer in terms of global supply.
That means oil prices could be heading higher over the medium-term.

But instead of demand inexorably rising and pushing up prices to stratospheric heights, in reality, sustained higher prices could lead to demand destruction. “Before the end of the decade, the market looks likely to reach an inflexion point after which demand growth may start to decelerate, as a combination of high oil prices, environmental concerns and cheaper and cleaner fuel alternatives kick in,” the IEA concluded.

So while stagnating oil production could inflict pain on the global economy in the coming years, consumers may finally begin to switch away from oil in earnest.

By Nick Cunningham of OIlprice.com




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News