OPEC’s loss of market power to what was once its biggest customer will continue until the middle of the next decade as US shale oil thrives.
By 2024, the Organization of Petroleum Exporting Countries’ capacity to pump crude will actually shrink because of declines in Iran and Venezuela, according to the International Energy Agency. As rivals grow, the amount of oil the world needs from the cartel each year won’t recover to pre-2016 levels – before OPEC started cutting production – throughout the period.
The report may be sobering reading for OPEC, which has capped its production for the past two years to stave off a global glut that would depress prices. Although its cutbacks have mostly achieved those aims, they’ve also invigorated the shale-oil boom in the US, helping the country become the world’s biggest crude producer.
The second wave of the US shale revolution is coming,This will shake up international oil and gas trade flows, with profound implications for geopolitics.
Fatih Birol, the IEA’s executive director said on Monday at the CERAWeek energy conference in Houston.
America’s energy expansion will proceed, accounting for 70 percent of the growth in global production capacity through to 2024, the Paris-based IEA said in its medium-term report. By that time, the nation could be able to export 9 million barrels a day, exceeding the export capabilities of Russia and coming close to those of Saudi Arabia, the agency said.Read More
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