The U.S.' crude oil exports is forecast to catch up with the world's largest crude exporter, Saudi Arabia, by 2024, according to the International Energy Agency’s (IEA) annual Oil 2019 report that makes five-year estimates on the global oil market.
'Before the end of 2024, the U.S. will export more oil than Russia, and close in on Saudi Arabia as the world’s largest exporter,' the report said.
The IEA report released Monday showed that the rise in U.S. crude exports is 'due to the ability of the U.S. shale industry to respond quickly to price signals by ramping up production.'
'As a result of its strong oil production growth, the U.S. will become a net oil exporter in 2021, as its crude and products exports exceed its imports. Towards the end of forecast [by 2024], U.S. gross exports will reach 9 million barrels per day, overtaking Russia and catching up on Saudi Arabia,' the report said.
Unable to export any crude oil until the end of 2015 due to a self-imposed ban, the U.S. saw sharp increases in crude exports a result of the shale revolution in the country that started in 2008.
The U.S.' crude oil production averaged 5 million barrels per day (bpd) in 2008, and soared to 9.35 million bpd in 2017 for an 87 percent increase, according to data of the U.S.' Energy Information Administration (EIA).
While crude production in the U.S. averaged 10.95 million bpd in 2018, it reached a new all-time high of 11.7 million bpd for the week ending Nov. 9, 2018 when it surpassed Saudi Arabia's oil output, according to the EIA.
Most recently, the U.S.' crude oil output climbed to a fresh record high level of 12.1 million bpd for the week ending Feb. 22, 2019, the data showed.
- Production to increase further
The IEA said it forecasts U.S. crude oil production rising by 2.8 million bpd to 13.7 million bpd by 2024, led by higher tight oil output primarily in the U.S.' resource-rich Permian Basin, located in west Texas and southeast Mexico.
In the Permian region, output is expected to ramp up to 5.55 million bpd in 2024, from 2.62 million bpd in 2018, according to the IEA's report.
The EIA, on the other hand, estimates that U.S. crude oil production will climb above 13 million bpd as early as next year.
According to the EIA's Short-Term Energy Outlook report for February 2019, the U.S.' crude oil production is forecast to average 12.4 million bpd in 2019 and 13.2 million bpd in 2020.
The IEA said the U.S. would lead supply growth worldwide over the next five years. 'The second wave of the U.S. shale revolution is coming,' the IEA's Executive Director Dr. Fatih Birol said in the report.
'It will see the U.S. account for 70 percent of the rise in global oil production,' he said, adding 'This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy.'
- Crude exports at record high
Despite rising shale oil production in the U.S., the country's self-imposed ban prevented exports of crude up to December 2015.
The ban was imposed during the 1970s after Arab oil-producing states placed an embargo on the U.S. and its western allies during the 1973 OPEC oil crisis.
Thus, domestic crude oil had long been considered a significant commodity for the U.S.' energy security, until former U.S. President Barack Obama lifted the ban in December 2015.
After the ban was lifted, U.S. crude was exported to 27 destinations in 2016, and this number rose to 37 countries last year, according to the EIA.
The U.S.' crude oil exports averaged 591,000 bpd in 2016, increased to average 1.16 million bpd in 2017, and climbed further to reach 2.61 million bpd on average during November 2018, the data showed.
The country's exports of crude oil reached a record high level of 3.61 million bpd for the week ending Feb. 15, 2019, according to the EIA's data.
On the other hand, both Saudi Arabia and Russia are expected to lower their crude production and exports as part of the agreement signed between OPEC and non-OPEC countries on Dec. 7, 2018. This pact stipulated that total oil production would lower by 1.2 million bpd for the first six months of 2019.
Saudi Arabia plans to cut its crude oil exports to below 7 million bpd in April 2019, according to world media reports.
- Iran, Venezuela output to fall
The anticipated increase in the U.S.' crude oil output would partially replace the production declines in Iran and Venezuela.
With Washington's sanctions on Tehran and Caracas, both countries' oil production levels are set to decrease this year.
The IEA said in its report that it expects Iran's oil production to fall to 2.65 million bpd in 2019, from 3.85 million bpd in 2018.
Venezuela's oil production is also forecast to decrease to 750,000 bpd this year, from 1.31 million bpd last year, according to the report.
Thus, the two countries are expected to account for a total of 1.76 million bpd in lost production in 2019.
By Ovunc Kutlu