The relentless rise of U.S. shale growth could soon spark another dramatic change of policy from leading oil producers, according to the latest monthly report from the International Energy Agency (IEA).
"U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth," the IEA said in its closely-watched report published Tuesday.
"This is a sobering thought for other producers currently sitting on shut-in production capacity and facing a renewed challenge to their market share," the Paris-based organization added.
In November 2014, the so-called U.S. shale revolution prompted OPEC to announce a new strategy geared towards improving its market share. Analysts interpreted this move as an attempt to squeeze higher-cost producers, including U.S. shale oil, out of the market. Market conditions in early 2018 seem to be reminiscent of that first wave of U.S. shale growth, prompting the IEA to warn history could be repeating itself.
The latest monthly report from the IEA comes at a time when rising U.S. crude exports and a stronger-than-anticipated price rally have threatened to loosen Russia and Saudi Arabia's grip on key overseas markets.
"We are seeing United States production rising very, very dramatically before our very eyes and that's likely to continue in 2018," Neil Atkinson, head of the oil industry and markets division at the IEA, told CNBC Tuesday.
He added that because the U.S. was essentially a "free market" for oil; its production has risen and fallen with the oil price.
Oil prices have skyrocketed around 50 percent since the middle of last year, with Brent crude rising to multi-year highs above $71 a barrel, before a pullback last week wiped out its gains for 2018.
The main price driver has been a supply cut from major oil producing group OPEC and Russia, who started to withhold output in January last year. The production cuts by OPEC and 10 other allied producers, which are scheduled to last throughout 2018, are aimed at clearing a supply overhang and propping up prices.
One of the main beneficiaries of these cuts is the producers' major competitor, U.S. shale oil. U.S. oil producers are staging a dramatic comeback amid a recovering oil price that has allowed many of them to restart operations.
At the start of the year, the IEA predicted the U.S. would be well-placed to overtake the likes of Saudi Arabia and Russia as the world's leading energy producer by 2019. The group's latest report reaffirms that forecast.
In just three months to November, U.S. crude output was seen increasing by a "colossal" 846,000 barrels a day, according to the IEA. That will soon be enough to surpass the likes of OPEC kingpin Saudi Arabia and by the end of the year it could even be enough to outperform Russia to become the global leader, the group added.
— CNBC's Tom DiChristopher contributed to this report.