The U.S. became the world’s largest oil producer in 2018 and will emerge as a top oil exporter within the next five years, according to the International Energy Agency’s
Growth in global oil demand will likely ease over the next few years, but peak oil remains out of sight, the International Energy Agency said in its annual oil market forecast released Monday. The Paris-based organization said demand would grow at a more measured pace due weakening economic sentiment in many countries.
IEA also projected that the U.S. will emerge as a top oil exporter within the next five years, surpassing Russia and nearly matching Saudi Arabia in crude oil exports by 2024.
“The second wave of the U.S. shale revolution is coming,” said IEA Executive Director Fatih Birol. “It will see [the] U.S. account for 70 percent of the rise in global oil production and some 75 percent of the expansion in LNG trade over the next five years. This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy.
West Texas’ booming Permian Basin will be the primary driver of this unprecedented transformation, but moving oil and gas out of the region will hinge on the ability of midstream companies to add additional pipeline capacity. Pipeline operators are expected to add upwards of three million barrels in new Permian to Texas Gulf Coast crude oil takeaway capacity by the end of 2020. Projects like Energy Transfer Partners’ Permian to Gulf Coast Pipeline and Phillips 66’s Grey Oak Pipeline will be critical to alleviate transportation bottlenecks that has slowed production over the past year.