The United States became the world’s biggest oil producer in 2018, and over the next five years, the nation will take aim at becoming the top oil exporter, according to the International Energy Agency.
IEA forecasts U.S. exports of crude oil and petroleum products will nearly double, hitting about 9 million barrels per day by 2024. At that level, the U.S. will surpass Russia’s shipments and threaten to unseat Saudi Arabia, the current top exporter.
The forecast from IEA comes just weeks after the U.S. exported a record 3.6 million barrels per day of crude oil. The country is also a major exporter of petroleum products, including refined fuels like gasoline.
Those shipments will surge in the coming years as crude production from the nation’s shale fields continues to boom, IEA says in its annual five-year oil outlook. The Paris-based adviser to oil consumers and producers sees U.S. crude output — already at a record 12 million bpd — growing by another 4 million bpd through 2024.
“The second wave of the U.S. shale revolution is coming,” IEA Executive Director Fatih Birol said in a statement. “It will see the United States 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.”
Pulling ahead of Russia and Saudi Arabia in exports would further erode their influence in the oil market.
Saudi Arabia and Russia have formed an alliance in recent years, coordinating oil production among OPEC and other oil-producing countries. The so-called OPEC+ alliance has capped output for much of the last two years, helping to boost oil prices after a punishing downturn.
Most of the output growth from OPEC over the next five years will come from Iraq, IEA says. The group thinks the country will be the world’s third-biggest source of new supply, helping to offset production declines in Iran and Venezuela, both of which are grappling with U.S. sanctions on their state-controlled energy industries.
On Monday, Birol said the IEA’s long-standing effort to assess the oil market without much regard for geopolitics is becoming increasingly difficult.
“We are seeing that geopolitical concerns are casting an increasing shadow on the oil markets today and tomorrow,” he said during a press conference at CERAWeek by IHS Markit, a major energy conference in Houston.
The world will need new supply, in IEA’s view. The group sees no signs that growing oil demand will peak in the coming years. It forecasts the world’s appetite for oil will increase at an average 1.2 million bpd over the next five years, roughly in line with recent growth trends.
While the group sees electric cars and fuel efficiency sapping demand for gasoline, IEA thinks rising petrochemicals and jet fuel consumption will offset any weakness at the pump.
In addition to the U.S. and Iraq, IEA sees countries like Brazil, Norway and Guyana meeting rising demand for oil.
In a major shift, the U.S. became the biggest source of oil demand growth in the world, overtaking China, long the engine of global commodity consumption. The robust U.S. consumption was driven by strong economic growth and high demand in the petrochemicals industry, which processes fossil fuels and byproducts into chemicals like plastics.
“US oil consumption [growth] last year was about a half-million barrels per day, and as such it was the highest in all the countries around,” Birol said on Monday. “It was the first time that the United States in the last two decades was the No. 1 driver of oil consumption growth.”
The U.S. achieved the feat against a backdrop of slowing global economic growth, particularly in China.