Middle East will become the major source of oil by 2020 as the USA’s tight oil output and non-OPEC supply will decline worldwide, said International Energy Agency (IEA)
In its World Energy Outlook 2014 report, IEA warned of the longer-term signs of stress that are emerging in the energy industry.
World oil supply is expected to rise to 104mn bpd in 2040, but hinges critically on investments in the Middle East, it added.
Meanwhile, growth in world oil demand will slow down to a near halt by 2040, as demand in many of today’s largest consumers (the USA and Japan) will decline by 2040, said the firm on energy consultancy.
As a result, Middle East will emerge as a key driver of growth, as would India, sub-Saharan Africa and Southeast Asia, it noted.
Fatih Biro, chief economist at IEA, said that a well-supplied oil market in the short-term should not disguise the challenge that lie ahead, as the world is set to rely more heavily on a relatively small number of producing countries.
“The apparent breathing space provided by rising output in the USA over the next decade provides little reassurance, given the long lead time of new upstream projects,” Biro noted.
