The changing landscape of oil markets

According to the latest IEA monthly oil market report, US is on track to become the world’s largest oil producer in 2018. While OPEC and some non-OPEC countries such as Russia have agreed to maintain a joint restriction on crude supply for a second year in 2018, in order to curb surplus and sustain prices, the US is not participating in the deal. After having cut costs dramatically to respond to the oil price collapse of 2014-2015, US shale oil producers are enjoying a second wave of growth driven by the upward trend in prices in 2017.

US is close to overtake Saudi Arabia in crude production and might also overtake Russia, becoming the global leader by the end of this year, IEA’s analysis said. In 2018, rising production in non-OPEC countries, led by the US, is likely to grow by more than demand.

The upcoming IEA’s Oil 2018  five-year forecast report, due to be released in early March, will add further details to the changing picture of global oil supply and demand.

The forecasts of the recently released Annual Energy Outlook (AEO2018) by the US Energy Information Administration (EIA) partially support IEA’s analysis. The study said tight oil production made up 54% of the US total in 2017 and is set to remain the largest source of US future crude production. EIA predicts US to shift from net energy importer to net energy exporter in the next years, with higher crude oil prices leading to more oil and natural gas production and accelerating the transition into a net exporter by 2020.

Looking ahead to the next two decades, the future of global oil markets appears in deep transformation. According to the latest IEA World Energy Outlook, oil demand will continue to grow to 2040, albeit at a steadily decreasing pace. Together with US shale revolution, the major trends reshaping global oil balances are development of Middle East countries’ refinery capacity and the growing demand from Asian countries, mainly India and China.

The projections of BP’s latest annual Energy Outlook show demand for oil and other liquid fuels to gradually slow and plateau in late 2030s, due to a revolution in transport driven by deployment of self-driving electric cars and projected measures to reduce plastic waste. The 2018 edition of BP Energy Outlook marks the first time that BP has shown oil consumption peaking in its long-term forecasts.

Also ExxonMobil’s Outlook for Energy predicts a peak in liquid fuels use by the world’s light-duty vehicle fleet by 2030, due to a rise in electric vehicles and efficiency gains in conventional engines.


Share on facebook
Share on twitter
Share on linkedin
Share on tumblr

Innovation Inspired by Nature

Nature provides key benefits for resilience and can be the foundation for sustainability. It cleans the air and water, it provides food, beauty and serenity for people. The “green” realm provides immense benefits to societies, cities, and their citizens. Perspectives and solutions for creating cities that are resilient, sustainable, liveable and just for everyone.


Ocean. Stories of Humans and Climate Change

The ocean tells stories of climate change. Journalism brings them to the world. A dialogue on how climate change and pollution are affecting the ocean and people’s lives, and how stories grounded in scientific evidence can be made accessible to the public at large through journalism and writing.


The Green Deal Dives into the Blue Economy

Oceans will play a key part in the ongoing transition: they are an invaluable resource for the climate-neutral world, providing renewable energy, food, and solutions. However, they also host fragile ecosystems that are suffering from climate inaction. Policymakers, scientists, financial actors, and civil society have their eyes fixed on the sea, because “there can be no Green Deal without a sustainable blue economy.”