No Peak in Oil Demand in Sight
The U.S. will drive global oil supply growth over the next five years thanks to the remarkable strength of its shale industry, triggering a rapid transformation of world oil markets according to the International Energy Agency’s annual oil market forecast. By the end of the forecast, oil exports from the U.S. will overtake Russia and close in on Saudi Arabia, bringing greater diversity of supply.
While global oil demand growth is set to ease, in particular as China slows down, it still increases an annual average of 1.2 mb/d to 2024, according to the report, Oil 2019. The IEA continues to see no peak in oil demand, as petrochemicals and jet fuel remain the key drivers of growth, particularly in the U.S. and Asia, more than offsetting a slowdown in gasoline due to efficiency gains and electric cars.
Global oil market changes are expected to have long-lasting implications on energy security and market balances throughout our forecast period to 2024. The U.S. is increasingly leading the expansion in global oil supplies and accounts for 70 percent of the increase in global capacity to 2024, with significant growth also seen among other non-OPEC producers, including Brazil, Norway and new producer Guyana.
Iraq reinforces its position as one of the world’s top producers. As the world’s third-largest source of new supply, it also drives growth within OPEC to 2024.
In the longer term, security of supply is linked to upstream investment. Preliminary investment plans by major international oil companies indicate that upstream investment is set to rise in 2019 for the third straight year. For the first time since the 2015 downturn, investment in conventional assets could increase faster than for the shale industry.