US to become the world’s top oil producer

But by 2020, the oilfields of Texas and North Dakota will be past their prime and the Middle East will regain its dominance – especially as a supplier to Asia, the International Energy Agency (IEA) said yesterday.

A boom in shale oil in the United States has reversed a decline in its oil output and the IEA, adviser to industrialised nations, predicted in its 2012 World Energy Outlook the US would surpass Riyadh as top producer in 2017.

Introducing this year’s outlook at a news conference in London, IEA chief economist Fatih Birol said the agency now expects the re-ordering earlier.

“We expect in 2015 the US to be the largest oil producer in the world,” he said.

“We see two chapters in the oil markets,” he said. “Up to 2020, we expect the light, tight oil to increase – I would call it a surge. And due to the increase coming from Brazil, the need for Middle East oil in the next few years will definitely be less.

“But due to the limited resource base of US tight oil, it is going to plateau and decline. After 2020 there will be a major dominance of Middle East oil.”

Oil prices would continue to rise, the IEA said, and spur development of unconventional resources such as the light, tight oil that has fueled the US oil boom, oil sands in Canada, deepwater production in Brazil and natural gas liquids.

The average crude import price of IEA members will climb steadily to $128 a barrel in 2012 terms by 2035 – up $3 from 2012’s outlook. The nominal price by 2035 will be $216, similar to last year’s assumption.

Other nations are unlikely to match the success of the United States in tapping shale, the IEA said.

While tight oil output is set to soar in the next few years, the Paris-based agency said the world was not “on the cusp of a new era of oil abundance”.