LONDON (Reuters) - The United States will drive global oil supply growth over the next five years, adding another 4 million barrels per day to the country’s already booming output, the International Energy Agency said on Monday.
U.S. oil output will climb to 19.6 million bpd by 2024 from 15.5 million last year, the Paris-based agency said. Gross crude exports will double, leading to greater competition especially in the Asian market.
The outlook points to pressure on demand for crude from the Organization of the Petroleum Exporting Countries as the United States and other rivals expand supplies. However, in a boost for the producers, the IEA doesn’t see a peak in global demand yet.
“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, an adviser to the United States and other industrialised countries, said in its five-year outlook.
A boom in U.S. oil supply due to shale oil has countered efforts by OPEC and its partners led by Russia to restrain supplies. The so-called OPEC+ group began a new round of oil supply cuts in 2019 to support prices.
“By the end of the forecast (2024), oil exports from the United States will overtake Russia and close in on Saudi Arabia, bringing greater diversity of supply,” the IEA said.
Global oil demand growth is set to ease as China slows, but will still rise by an annual average of 1.2 million bpd to 2024 when it will reach 106.4 million bpd.
Even so, the IEA doesn’t expect moves such as greater adoption of electric cars to put a cap on demand growth yet. Goldman Sachs has said oil demand could peak by 2024 under some circumstances.
“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 IEA said.
Demand for OPEC crude will rise but given the growth expected from the United States and other non-OPEC producers, Saudi Arabia and its allies will probably have to maintain efforts to withhold supplies.
“Market management by producers is likely to remain necessary for some time given the outlook for the call on OPEC crude,” the report said.
The IEA forecasts demand for OPEC crude will drop in 2020 and then rise to average 31.3 million bpd in 2023. The 2023 figure is up by just 600,000 bpd from this year and less than the previous forecast.
Iraq, the IEA said, would reinforce its position as a top producer, becoming the world’s third-largest source of new supply and driving growth within OPEC.
“The increase will have to compensate for steep losses from Iran and Venezuela, as well as a still-fragile situation in Libya,” the IEA said.
Reporting by Dmitry Zhdannikov; Editing by Dale Hudson and Susan Fenton