The U.S. will account for 80% of the increase in the world’s oil supply by 2025, as the country aims to become an “undisputed global oil and gas leader,” according to the International Energy Agency’s (IEA) annual energy forecast.
The IEA’s World Energy Outlook covered energy data for 29 countries. While the U.S. strengthens its position as a dominant force in the oil and gas industry, China will surpass the country as the biggest oil consumer worldwide.
IEA Executive Director Fatih Birol said that the growing presence of the U.S. manifests a “major upheaval for international market dynamics”. The significant growth in U.S. shale oil activity will also help it match Saudi Arabia’s production boom between 1966 and 1981. For this reason, above ground storage tanks will need to be more efficient and comply with several guidelines, including the API 653 tank repair standards.
The IEA expects that U.S. shale oil can be technically recovered to reach around 105 billion barrels by 2025, which was around 30% higher than its original forecast. It also adjusted its forecast output at 34% higher than the initial estimate, amounting to nine million barrels a day. As the country will become the top oil and gas producer, prices will remain low by the late 2020s.
The cost of oil by 2025 will amount to $83 per barrel, down from IEA’s previous expectation of $101. By 2040, the agency also lowered its price forecast to $111 from $125. For this reason, the projected low prices will help stimulate the demand for oil.
Despite the increasing popularity of electric vehicles, oil consumption in the U.S. and the rest of the world will reach more than 100 million barrels per day by 2025. Oil and gas producers in the U.S. should invest in storage solutions and other contingency measures, as output and demand would surge in the future.