By 2019, tight oil supply outside the US could reach 650,000 b/d, including 390,000 b/d from Canada, 100,000 b/d from Russia, and 90,000 b/d from Argentina, the International Energy Agency forecasts in its annual 5-year Oil Market Outlook released June 17.
In the US, meanwhile, light, tight oil output is projected to roughly double from 2013 levels to 5 million b/d by 2019.
Several countries will try to replicate that success despite the fact that only the US offers the unique mix of above- and below-ground attributes that made the shale and light, tight oil boom possible, IEA says.
However, IEA’s Medium-Term Oil Market Report 2014 also sees global oil demand growth slowing, capacity growth from member countries of the Organization of Petroleum Exporting Countries facing headwinds, and growing regional imbalances in gasoline and diesel markets.
The issue of OPEC producers’ aging fields is complicated by the presence of security concerns, which has dissuaded some international oil companies from investing in the organization’s assets. All the while, IEA sees as much as three fifths of OPEC’s expected growth in capacity by 2019 coming from notably unstable Iraq, which presents “considerable downside risk.”
IEA notes that the projected addition of 1.28 million b/d to Iraq was a conservative forecast made before the launch of last week’s military campaign by insurgents that subsequently claimed several key cities in northern and central Iraq (OGJ Online, June 17, 2014).
As global demand rises 1.3%/year to 99.1 million b/d in 2019, the market will hit an “inflexion point,” after which demand growth may start to decelerate because of high oil prices, environmental concerns, and cheaper fuel alternatives, IEA predicts.
This will lead to fuel-switching away from oil, as well as overall fuel savings, leaving IEA to conclude that peak oil demand growth for the market as a whole is already in sight.