Over the next few years, world consumers are going to become more dependent on North and South America to satisfy their growing thirst for crude oil, according to a forecast to be released Thursday by the International Energy Agency.
The Paris-based organization estimated that the world would increase total oil production every year between 2010 and 2016 by an average 1.1 million barrels a day — roughly 100,000 barrels short of the expected increase in global demand over the period.
“After the sharp increase in oil demand in the second part of 2010 as the global economy recovered more quickly than anticipated from the recession, we now foresee higher mid-decade demand,” the report said.
Tightening oil markets along with spreading unrest in the Middle East have driven oil prices 25 percent higher in the last year. But on Wednesday, concerns about a weakening economy sent prices sharply lower. The benchmark light sweet crude oil in the United States fell $4.56 a barrel to close at $94.81. If a major global downturn occurs and begins a more lasting decline in energy demand and prices, as happened in late 2008 and 2009, it could throw off forecasts.
The report warned that high oil prices “are weighing down on an already-fragile macroeconomic and financial situation” in the developed countries, while burdening the financial health of developing countries and pushing up inflation.
The energy agency predicts that 40 percent of demand growth over the next few years will come from China, with most of the rest coming from elsewhere in Asia and the Middle East. The agency expects Europe and the United States to have generally flat energy demand, in large part because their economies are expected to grow less robustly than those in the developing world, while their vehicles should become increasingly efficient.
Saudi Arabia and a handful of other mostly Middle Eastern countries with excess production capacity will have to supply more oil, but global markets will need to rely increasingly on producers outside the Organization of the Petroleum Exporting Countries. With production declining in Mexico and the North Sea, the energy agency suggested that Canada, Brazil, the United States and Colombia would need to take up the slack.
The report projected that by 2016, Canada, already the most important source for United States oil imports, would produce 1.3 million additional barrels a day as it expanded production from theoil sands in Alberta. Brazil is projected to increase production by a million barrels a day because of major new offshore fields in deep waters.
The United States, despite the slowdown in oil drilling in the Gulf of Mexico after the Deepwater Horizon disaster last year and declining production in Alaska, will produce an additional 500,000 barrels a day largely from expanded drilling in oil shale fields in North Dakota and Texas, the agency said.
And Colombia is expected to increase production by 300,000 barrels a day, as a guerrilla insurgency’s decline encourages international oil companies to return.
The energy agency cautioned that its optimistic outlook for Canada depended partly on the United States government’s approval of the Keystone XL pipeline, which would take more than 500,000 barrels a day of partly refined Canadian crude from the oil sands to Texas and Louisiana refineries for eventual distribution to the Northeast. Canada will most likely sell the excess crude to China if the pipeline is not approved, but the switch could produce years of delays.
Environmentalists oppose the pipeline because they argue that production of oil from oil sands, which requires the burning of large amounts of natural gas, emits more greenhouse gases than production of most oil products used in the United States.
OPEC will remain a vital source of world oil, the report said, noting that Iraq in particular held the potential to significantly increase exports over the next several years.
In a separate report released last week, BP noted that world oil production rose 1.8 million barrels a day last year, with OPEC and non-OPEC producers each roughly responsible for half the growth.
In a projection for 2030 made earlier in the year, BP said OPEC would be “primarily” responsible for meeting growing demand for liquid fuels, although it mentioned Canadian oil sands, deepwater drilling off Brazil, and the countries that made up the former Soviet Union as promising sources of future supplies.