The global energy map is changing rapidly, with potentially far-reaching consequenaces for energy markets and trade, according to the International Energy Agency (IEA). At the heart of the IEA’s World Energy Outlook 2012 (WEO 2012), launched in London on 12 November, is the resurgence in oil and gas production in the US. The agency predicts that by around 2020 the US will become the largest global oil producer, overtaking Saudi Arabia until the mid-2020s. Additionally, improved fuel efficiency in transport will see North America become a net exporter around 2030, increasing the importance of the security of strategic routes taking Middle East oil to Asian markets.

Fatih Birol, IEA Chief Economist, told MEES: “There are three major drivers of the new energy map: production growth from the US and Canada; the surge in Iraqi production; and the nuclear energy contraction following the Fukushima disaster. Yet from the OPEC viewpoint, even though we see strong growth in US and Canadian production, we do not expect major implications in terms of oil prices. The cost of marginal production and the level of prices for maintaining fiscal balances will remain key drivers. Prices will continue high enough to bring oil to market even from the most challenging fields.” (CONTINUED - 1256 WORDS)