The International Energy Agency on Tuesday said that the United States is all set to replace Russia as the world’s largest oil producer in the world by 2019, owing to the country’s shale oil boost in contrast to the global markets.
At an event in Tokyo, IEA Executive Director Fatih Birol said that the United States would outdo Russia as the biggest crude oil producer if not this year, then “definitely next year”.
“U.S. shale growth is very strong, the pace is very strong … The United States will become the No.1 oil producer sometime very soon,” he told Reuters.
For the first time since 1970s, U.S. crude oil output went above 10 million barrels per day (bpd) in late 2017, leaving behind top oil exporter Saudi Arabia. Earlier this month, the U.S. Energy Information Administration had said that the United States’ output will surpass 11 million bpd by late 2018. The output level will take it ahead of the top producer Russia, which pumps just below that mark.
Fatih Birol said that he did not see the U.S. oil production peaking before 2020, and neither does he foresee a decline in the next four to five years.
The soaring U.S. production is coming at a time when other major producers – including Russia and members of the Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) – are curbing output to increase prices.
U.S. oil is also increasingly being exported to the world’s fastest growing markets in Asia which has disrupted the OPEC and Russian market share. Birol said production growth was not just strong in the United States.
“Canada, especially the oil sands and Brazilian offshore projects. These are the two major (non-U.S.) drivers,” he said.
On the demand side, Birol said the IEA expected growth of around 1.4 million bpd in 2018.