WASHINGTON – The U.S. Energy Information Administration (EIA) has analyzed the validity of the conclusion of a recent report that said the U.S. could end up producing more crude oil than Saudi Arabia around the year 2020.
The International Energy Administration (IEA) predicted in a report it released in November that the U.S. will surpass Saudi Arabia’s oil output up through the mid-2020s. The report also predicted that North America will become a net oil exporter around 2030, and that 90% of oil exports from Middle Eastern countries will be sold to Asia by 2035.
The U.S. EIA's analysis disagreed with the IEA's report, saying that although higher U.S. oil production can hold down global oil prices to some degree, which was evident in 2012 as spare global oil production capacity was limited, the Organization of the Petroleum Exporting Countries’ (OPEC) production level is a major factor as to whether the U.S. will eventually outproduce Saudi Arabia.
For example, the overall ranking will depend on changes in global demand for oil depend on economic activity, with the EIA noting that global liquids demand averaged 85.9 million barrels per day (bbl/d) in 2007, but fell to 84.8 million bbl/d in 2009 due to the economic crisis. Saudi Arabia’s crude oil and condensate production was 8.7 million bbl/d in 2007 but, after rising to 9.3 million bbl/d in 2008, fell to 8.2 million bbl/d in 2009. The production capacity of OPEC countries such as Iraq, Iran, and Venezuela, and non-OPEC countries, which could change dramatically over the next 20 years, will also affect global oil and fuel prices.
In addition, the EIA noted that the U.S. economy will not necessarily be protected from price shocks that affect the global oil marketplace, and the EIA predicts that Saudi Arabia will still maintain its role as the only holder of significant spare oil production capacity among global oil producers. Lastly, the EIA said the accounting conventions used to calculate future oil production play a role in the IEA's predictions.