Adewale Sanyaolu with agency report
The United States will overtake Russia as the world’s biggest oil producer, if not this year, but by 2019 at the latest, the International Energy Agency (IEA) has decleared. This was even as US oil imports dropped to its lowest level since 2001.
IEA Executive Director, Fatih Birol, said this at an event in Tokyo that United States would overtake Russia as the biggest crude oil producer “definitely next year”, if not this year.
This development may not augur well for Nigeria as US remained its second biggest customer coming after India.
According to the 2017 third quarter report for oil exports, in terms of export destinations, India (19 per cent) remains Nigeria’s most important crude oil buyer, with US following with (15 per cent). The US, in the period under review, increased its crude imports from Nigeria by 66 per cent.
“US shale growth is very strong, the pace is very strong. The United States will become the No. 1 oil producer some time very soon,” Birol said.
US crude oil output rose above 10 million barrels per day (bpd) late last year for the first time since the 1970s, overtaking top oil exporter, Saudi Arabia.
The US Energy Information Administration said early this month that US output would exceed 11 million bpd by late 2018. That would take it past top producer, Russia, which pumps just below that mark.
Birol said he did not see US oil production peaking before 2020, and that he did not expect a decline in the next four to five years.
The soaring US production is upending global oil markets, coming at a time when other major producers – including Russia and members of the Middle East-dominated Organisation of the Petroleum Exporting Countries (OPEC) – have been withholding output to prop up prices.
US oil is also increasingly being exported, including to the world’s biggest and fastest growing markets in Asia, eating away at OPEC and Russian market share.
Meanwhile, US net imports of crude oil fell last week by 1.6 million bpd to 4.98 million bpd, the lowest level since the EIA started recording the data in 2001, reflecting further erosion in a market OPEC has been relying on for decades.
Birol said production growth was not just strong in the United States.
“Canada, especially the oil sands, and Brazilian offshore projects. These are the two major (non-U.S.) drivers,” he said.
On the demand side, Birol said the IEA expected growth of around 1.4 million bpd in 2018.