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Thursday, November 14, 2013

U.S. to Surpass Saudi as Top Oil Producer by 2016

Reuters, November 12, 2013

LONDON—The United States will stride past Saudi Arabia and Russia to become the world’s top oil producer by 2016, the West’s energy agency said, bringing Washington closer to energy self-sufficiency and reducing the need for OPEC supply.

But by 2020, the oilfields of Texas and North Dakota will be past their prime and the Middle East will regain its dominance—especially as a supplier to Asia, the International Energy Agency (IEA) said on Tuesday.

The IEA, which advises large industrialised nations on energy policy, predicted in its 2012 World Energy Outlook the United States would surpass Riyadh as top producer in 2017.

Introducing this year’s outlook, IEA Chief Economist Fatih Birol said 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 light, tight oil that has fuelled the U.S. oil boom, oil sands in Canada, deepwater production in Brazil and natural gas liquids.

While tight oil output is set to soar in the next few years, the Paris-based 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.

"The Middle East is and will remain the heart of the global oil industry for many years to come," Birol said.

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