IEA: U.S. to Drive Oil Supply Growth

Over the next five years, the U.S. will take aim at becoming the top oil exporter, the agency said.
Lauren MuskettMarch 11, 2019
IEA: U.S. to Drive Oil Supply Growth

U.S. crude oil exports will nearly double to 9 million barrels per day by 2024, surpassing shipments from Russia and nearly catching up to Saudi Arabia, currently the world’s largest oil exporter, the International Energy Agency (IEA) forecasted.

The agency said it expected the U.S. to add another 4 million barrels per day to its oil output over the next five years. IEA said it expected U.S. oil output, including natural gas liquids and other hydrocarbons, to rise to 19.6 million barrels per day by 2024. Output was 15.5 million last year.

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“The United States is increasingly leading the expansion in global oil supplies, with significant growth also seen among other non-OPEC producers, including Brazil, Norway, and new producer Guyana,” the IEA said in its five-year outlook.

The jump in U.S. production is being driven by shale.

According to the report, the U.S. has transformed into a major exporter in less than a decade because of the shale industry’s ability “respond quickly to price signals by ramping up production.” It will become a net oil exporter in 2021.

“The second wave of the U.S. shale revolution is coming,” IEA executive director Fatih Birol said in a statement. “It will see the United States account for 70% of the rise in global oil production and some 75% of the expansion in LNG trade over the next five years. This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy.”

The IAE said fuel-efficiency standards could reduce demand for gasoline, but those factors will be offset by demand for petrochemicals and jet fuel.

“The IEA continues to see no peak in oil demand, as petrochemicals and jet fuel remain the key drivers of growth, particularly in the United States and Asia, more than offsetting a slowdown in gasoline due to efficiency gains and electric cars,” it said.

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