OPEC, the Organization of the Petroleum Exporting Countries, said that the US will overtake it in terms of crude oil output within the next five years.
In its World Oil Outlook 2019 report released on Tuesday, OPEC said it expects its own output to fall to 32.8 million barrels a day by 2024. Its current capacity in 2019 is 35 million.
Comparatively, non-OPEC production led by US shale is expected to increase to 72.2 million barrels a day in 2024. This is a move up from 2019’s capacity of 64.4 million barrels.
OPEC is made up of 14 members, including the de-facto leader and oil-producing powerhouse Saudi Arabia. The group’s production has fallen substantially in the last year after an agreement with Russia late last year cut crude oil output . Since January 2019, crude oil prices have risen 15%. Total energy demand is expected to increase by 72 million barrels by 2040, at about 1% per annum.
In the report, OPEC said that 60% of the production growth is expected to come from the US. It will be predominately from Alaska and the Gulf of Mexico, in the form of shale.
“Non-OPEC supply prospects have been revised up sharply.More so, as US tight [shale] oil, in particular, has again outperformed expectations,” said Mohammad Sanusi Barkindo, secretary-general of OPEC, in the report.
“While there continues to be talk of more financial prudence in the tight oil patch, prospects for growth remain. Especially given that efficiency and technology gains have further increased,” Barkindo added.
In January the US Energy Department said that the US would become a net export of energy by 2020. The prediction was in the spirit of ramping off U.S. reliance on external sources.