Between 2019 and 2024, global demand growth for crude oil will rise by as much as 7.1 million barrels a day. The United States will supply 70% of that growth, according to the latest International Energy Agency (IEA) forecast.
While demand in the developed nations of the Organisation for Economic Co-operation and Development (OECD) is forecast to decline, demand from developing countries in Asia and for feedstock for petrochemical production will drive the increase in supply. Production of jet fuel is also forecast to rise, and the “IEA continues to see no peak in oil demand, as petrochemicals and jet fuel remain the key drivers of growth, particularly in the United States and Asia, more than offsetting a slowdown in gasoline due to efficiency gains and electric cars.”
As much as 3.3 million new barrels a day are also expected to come from Brazil, Canada, Norway and Guyana, bringing total growth from countries outside the Organization of the Petroleum Exporting Countries (OPEC) to between 6.1 million and 7.4 million barrels a day by 2024. OPEC production capacity is projected to decline by nearly 400,000 barrels a day over the same period.
The IEA also forecasts that the United States will become a net exporter of oil by 2021 based on combined exports of crude oil and refined products. By 2024, U.S. exports are forecast to rise to 9 million barrels a day. That exceeds the export capacity of Russia and is near the export capacity of Saudi Arabia. Last week, U.S. exports of crude oil totaled 2.7 million barrels a day and refined products exports totaled nearly 5 million barrels a day, already within 30% of the IEA’s projected total for 2024.
Among OPEC nations, sharp declines are forecast for Iran (1.2 million barrels a day) and Venezuela (56,000 barrels a day). The cartel’s supply growth will be led by Iraq (900,000 barrels a day) and the United Arab Emirates (500,000 barrels a day). If sanctions on Iran are removed, supply from the Islamic Republic could rise by 820,000 barrels a day.
Investment in finding and developing new sources is forecast to rise this year for the third consecutive year, with investments in conventional production (non-shale) likely increasing faster.
By 2024, China and India will account for 44% of the demand for projected growth, and India’s demand will be equal to China’s.
The IEA also notes that more than 50 major petrochemical projects are expected to come online by 2024 to meet global demand for plastics and other petrochemical products. About 30% of global demand growth in 2024 will result from this demand. Demand for gasoline is expected to rise by less than 1%, except in developing countries, where the rate is expected to be about twice that much.