HOUSTON -- OPEC's loss of market power to what was once its biggest customer will continue until the middle of the next decade as U.S. shale oil thrives.
By 2024, the Organization of Petroleum Exporting Countries' capacity to pump crude will actually shrink because of declines in Iran and Venezuela, according to the International Energy Agency. As rivals grow, the amount of oil the world needs from the cartel each year won't recover to pre-2016 levels -- before OPEC started cutting production -- throughout the period.
The report may be sobering reading for OPEC, which has capped its production for the past two years to stave off a global glut that would depress prices. Although its cutbacks have mostly achieved those aims, they've also invigorated the shale-oil boom in the U.S., helping the country become the world's biggest crude producer.
"The second wave of the U.S. shale revolution is coming," Fatih Birol, the International Energy Agency's executive director, said on Monday at the Cambridge Energy Research Associates energy conference in Houston. "This will shake up international oil and gas trade flows, with profound implications for geopolitics."
America's energy expansion will proceed, accounting for 70 percent of the growth in global production capacity through 2024, the Paris-based energy agency said in its medium-term report. By that time, the nation could be able to export 9 million barrels a day, exceeding the export capabilities of Russia and coming close to those of Saudi Arabia, the agency said.
Business on 03/12/2019