U.S. oil production is rising sharply and increased output from shale will be a "game changer" in global energy markets in the coming years, according to a new report out Tuesday by the International Energy Agency.
"U.S. shale oil will help meet most of the world's new oil needs in the next five years, even if demand rises from a pick-up in the global economy," the Paris-based agency said in its five-year outlook, called the Medium-Term Oil Market Report.
"North American supply is an even bigger deal than we thought. A real game changer in every way," said Maria van der Hoeven, the IEA's executive director.
She said that North American production has set off a "supply shock that is sending ripples throughout the world" and urged the United States to dismantle the Export Administration Act of 1979 that bans the sale of U.S. crude abroad, except to Canada and Mexico.
"This issue is on the table. I think it has to be addressed because if there are no export licenses for crude, then the industry will find different ways, as they are looking for now already with processed, half-processed products, things like that," van der Hoeven said.
The IEA report forecasts:
"North American supply to grow by 3.9 million barrels per day from 2012 to 2018, or nearly two-thirds of total forecast non-OPEC supply growth of 6 [million barrels per day]. World liquid production capacity is expected to grow by 8.4 [million barrels per day] – significantly faster than demand – which is projected to expand by 6.9 [million barrels per day]. Global refining capacity will post even steeper growth, surging by 9.5 [million barrels per day], led by China and the Middle East."