By Myrna M. Velasco
HOUSTON, Texas – The well-anticipated increase in oil exports of the United States will widen the crude choices of destination-markets, primarily Asia which is one of the key target markets.
This was indicated by the International Energy Agency (IEA) in a briefing with global journalists at the ongoing five-day CERAWeek conference here, emphasizing further that US exports are seen matching that of Saudia Arabia and will be surpassing Russia’s scale of exports.
IEA Executive Fatih Birol said US production is seen climbing significantly to as high as 13.72 million barrels per day in the next five years from currently at 2.78 million barrels/day – hence, bulk of that could be earmarked for export and Asia will be a key landing market.
The hike in production, according to the IEA chief, will be propelled by the Permian basin’s output – with it jumping to 5.5 million barrels per day in 2024 or roughly double from last year’s 2.62 million barrels per day.
And based on the energy think tank’s assumption, export of crude from the US Gulf Coast could expand by as much as 5.1 million to 8.4 million barrels per day in five years from the 2018 level of 4.9 million.
Meanwhile, Birol reckoned that global oil demand may slow down given the weakening economic figures, including the key markets of India and China in Asia; and further qualified that “there is no peak demand on the horizon.”
For the Permian basin of the US, which is a sedimentary basin straddling western part of Texas and southeastern part of New Mexico, it was noted that “nearly 41,000 new wells and US$308 billion in upstream spending between 2018-2023” will drive its output growth to the targeted 5.5 million barrels per stream day in the next five years.
Since 2017, production from that just one region – the Permian—was seen to have grown far more than any other entire country in the world.
As previously assessed by global consulting firm IHS Markit, such “stunning level of growth will comprise more than 60-percent of net global production growth during that timeframe.”
And with higher oil output being injected by US into the export market, that is seen calming jitters of immediate price spikes — which could then spare heavily importing countries from near-term financial setbacks.