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US to overtake Saudi as top oil producer in 2016 - IEA

12 November 2013

The International Energy Agency (IEA) published a report on November 12 claiming that the United States will overtake Saudi Arabia and Russia to become the world's top oil producer by 2016. But this situation will only be temporary, the agency says, as by 2020 the oilfields of Texas and North Dakota will be declining, and the Middle East will regain its dominance.

Fracking operations in North Dakota have given a huge boost to US oil & gas production
Fracking operations in North Dakota have given a huge boost to US oil & gas production

The IEA, which advises large industrialised nations on energy policy, predicted in its 2012 World Energy Outlook the United States would surpass Saudi Arabia as the top producer in 2017. Introducing this year's outlook, the agency now expects the re-ordering by 2016 at the latest.

The IEA said oil prices would continue to rise and spur development of unconventional resources such as the shale oil that has fuelled the US oil boom, the oil sands in Canada, deepwater production in Brazil and natural gas liquids. Other nations are unlikely to match the success of the United States in developing shale resources, the report states.

While tight oil output is set to soar in the next few years, the agency said the world was not on the cusp of a new era of oil abundance. By the mid-2020s, non-OPEC production will fall back and countries in the Middle East - home to core members of the Organization of the Petroleum Exporting Countries - will provide most of the increase in global supply.

Development of the plentiful, low-cost resources of the Middle East will need to continue, the report says, to meet growing demand from Asia, initially in China, and then after 2020 driven by India. 

China is due to overtake the United States as the largest oil-consuming country and Middle East oil consumption is expected to surpass that of the European Union, both around 2030, the IEA said. India is forecast to become the largest single source of global oil demand growth after 2020.

The share of the United States in global energy-intensive industries - chemicals, aluminium, cement, iron, steel, paper, glass and oil refining - will increase slightly thanks to cheaper energy. By contrast, the EU and Japan will lose one third of their current share.

The IEA also said that up to 10 million bpd of global refining capacity was at risk as global refining centres were relocating closer to Asia.

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