Daily Management Review

IEA: oil production will meet new demand in 2024


03/12/2019


In the next five years, demand for oil will continue to grow at a rate higher than its supply, follows from a forecast of the International Energy Agency until 2024. A 70% increase in production will be provided by the United States, which by the end of the forecast period will oust Russia from the position of the second oil exporter after Saudi Arabia. In case of extension of sanctions against Iran and Venezuela, OPEC countries can cut supplies by 2024, the agency expects.



Paul Lowry
Paul Lowry
The oil industry is going through a time of great change, geopolitics is once again strongly affecting its condition, and all this is happening against the background of a slowdown in the global economy, the forecast of the International Energy Agency (IEA) until 2024 says.

The agency still points to a lack of investment in oil production. Last year, they grew by only 6%. In 2019, investments in traditional projects may be ahead with development of shale deposits for the first time since 2015. At the same time, the average growth will be modest - only 4% per year.

The increase in demand over the next five years will be 7.1 million barrels per day (bpd), and the need for oil will rise to 106.4 million bpd. India and China will account for 44% of the demand, IEA expects.
In annual terms, by 2024, growth will slow to 1.2 million bpd (it was 1.3 million in the last year), but its peak in absolute volume is not yet visible. The expected reduction in consumption in China at this point will be offset by an increase in refining - in particular, an increase in demand for aviation fuel. New requirements for fuel for marine vessels, which come into force in 2020, will eventually result in growing demand for diesel.

With such a change in demand, total production in five years will grow less significantly, by 5.9 million bpd. The United States, which will account for 70% of growth (about 4 million bpd) will remain the main growth driver. The agency expects that by 2021 this country will become a net exporter of oil, and by 2024 it will export more oil than Russia and will near indicators of the largest supplier, Saudi Arabia. But for this, the United States will need large-scale investments in the development of pipelines, the IEA said. Also, production growth is expected in Brazil, Canada, Norway. In total, non-OPEC countries will increase shipments by 6.1 million bpd to 68.7 million bpd by 2024.

Among the OPEC countries, analysts expect a significant increase in supplies only from Iraq (from 4.9 million to 5.8 million bpd - this country will take second place in the cartel after Saudi Arabia) and from the UAE (from 3.35 million to 3, 85 million bpd).
At the same time, the Emirates can outrun Iran (now the country extracts 3.85 million bpd and take the third place in the list of OPEC suppliers. The increase in production compensates for its decline in Iran and Venezuela. At the same time, the total production of the cartel in five years will still fall by 400 thousand bpd (to 34.5 million bpd including condensate), the IEA expects.

source: iea.org






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