The global thirst for oil will grow in the next two decades driven by demand from emerging nations and the rise of the United States as the world’s top producer, the International Energy Agency said on Monday.
Oil demand will increase by 14 percent between now and 2035 to reach 99.7 million barrels a day, the OECD-linked energy watchdog said in its annual assessment of the energy markets of tomorrow.
This was 700,000 bpd more than the IEA forecast a year ago and signals that world is still figuring out how to put the global energy system on a more sustainable path, the IEA said.
Oil prices will rise too, it said, reaching $125 barrels by 2035 ($215 in nominal terms), from about $107 this year, and instead of the $120 forecast earlier.
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“Growth in oil consumption in emerging economies, particularly for transport in China, India and the Middle East, more than outweighs reduced demand in the OECD, pushing oil use steadily higher…,” the IEA said.
Transportation “is responsible for almost 40 percent of the increase in global oil demand,” the agency said with oil use for trucks mainly diesel increasing much faster than that for passenger vehicles.
In its new scenario, the IEA believes the US will become the world’s top oil producer by 2020,overtaking Saudi Arabia until the mid 2020’s..
“The recent rebound in US oil and gas production … is spurring economic activity … and steadily changing the role of North America in global energy trade,” the agency said.
Up until 2035, “the United States, which currently imports around 20 percent of its total energy needs, becomes all but self-sufficient in net terms a dramatic reversal of the trend seen in most other energy importing countries.”
The US energy market is going through radical upheaval sparked by the development of new technologies, especially the extraction of shale gas through a controversial process called “fracking” that has been limited or banned in other countries.
On the supply side, the IEA sees a decade long decline in the dominance of OPEC on the back of unconventional production from non-cartel countries.
Non-OPEC oil supply should reach 53 million bpd after 2015 (from 49 mbpd in 2011) in a supply rise that should end in 2025 when OPEC production will again dominate.
“Output from OPEC countries rises, particularly after 2020, bringing the OPEC share in global production from its current 42 percent up towards 50 percent by 2035,” the IEA said.
The key to OPEC output over the coming decades is Iraq, the IEA said, which could make the “largest contribution by far to global oil supply growth.”
The IEA believes that if stability is achieved, Iraq becomes “a key supplier to fast-growing Asian markets, mainly China, and the second-largest global exporter by the 2030s, overtaking Russia.”
“Without this supply growth from Iraq, oil markets would be set for difficult times, characterised by prices that are almost $15 higher” than the level tabled its outlook.
Source: AFP
