28 February 2018, Sweetcrude, Lagos – The International Energy Agency, IEA, has said the United States will beat Russia to become the world’s largest producer of oil in 2019.
This is coming as US shale oil boom continues to upend global markets.
IEA Executive Director Fatih Birol made the statement at an event in Tokyo the United States on Tuesday, saying the U.S. would overtake Russia as the biggest crude oil producer “definitely next year”, if not this year.
For the first time since the 1970s, U.S. shale output climbed above 10 million barrels per day (bpd) late last year, surpassing top oil exporter Saudi Arabia.
“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,” Birol told Reuters separately.
The U.S. Energy Information Administration said early this month that U.S. output would exceed 11 million bpd by late 2018, surpassing top producer Russia, which pumps just below that mark.
According to him, U.S. oil production would not peak before 2020, likewise, would it decline in the next four to five years.
U.S crude production keeps offsetting market share cuts by Russia and the Organisation of the
Petroleum Exporting Countries, OPEC.
OPEC and its partners agreed to cut a combined output of 1.8 million bpd starting from January 2017, a pact that has since been twice extended until the end of 2018.
OPEC celebrated its one-year anniversary since the Declaration of Cooperation and has recorded over 100 percent compliance to the cut deal, sending oil price to $70 per barrel early January from an all-time low of below $30pd in 2015.
Despite OPEC’s effort at shooting up prices by cutting production and supplies, the U.S. oil due to its cheapness and lightness is increasingly being imported, including by the world’s biggest and fastest growing markets in Asian countries such as India.
Meanwhile, U.S. net imports of crude oil fell last week by 1.6 million bpd to 4.98 million bpd, the lowest level since the EIA started recording the data in 2001, reflecting gradual take-over of the market from OPEC.
Birol added that the IEA expects a growth of around 1.4 million bpd in 2018.
