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IEA: U.S. to Account For 80% of Global Oil Supply by 2025

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Oil and gas platform in the gulf or the sea, The world energy, Offshore oil and rig construction.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.

Dominant Effect

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.

Price Matters

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.

API: U.S. Petroleum Deliveries in October Reached 10-Year High

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European Oil Pump Jack in Germany on a Sunny DayDemand for petroleum in the U.S. reached a 10-year high in October, after deliveries surged 1.1% year over year to an average 19.9 million barrels per day, according to the American Petroleum Institute (API).

A report showed that the figure represented the highest number for the month since 2007. While crude oil output remained high, the country became more energy independent, as petroleum imports dropped 0.8% to average just above 9.6 million barrels per day.

Global Leader

The API’s report somehow reflected the International Energy Agency’s (IEA) outlook for the U.S. as a dominant player in the global oil industry. For the ninth consecutive month in 2017, crude oil production reached more than nine million barrels per day. If the trend becomes stable, the IEA believes that the U.S. will account for 80% of the increase in global oil supply by 2025.

For this reason, energy companies should invest in storage solutions such as aboveground tanks, particularly those that comply with API 653 tank alteration standards.

Historic Increase

Shale oil production in the U.S. by 2025 will be similar to the output of Saudi Arabia between 1966 and 1981, according to the IEA. Its World Energy Outlook lifted its initial forecast for U.S. output by 34% to nine million barrels per day, while shale oil that can be technically recovered will consist of 105 billion barrels.

The growing dominance of the country will also help lower prices, which would reach $83 per barrel for 2025. Global oil consumption will reach more than 100 million barrels per day by that year, mainly because of China surpassing the U.S. as the biggest consumer, according to the forecast.

It remains to be seen whether the IEA’s forecast will indeed materialize, yet the API’s report indicated that growth prospects are somehow positive for the U.S. oil and gas industry.