The US Energy Information Administration (EIA) has published its 2020 Annual Energy Outlook. It predicts that the US will become a net exporter of crude oil and derived products this year as production continues to grow while demand lags behind.
While the US is now the world‘s biggest oil producer, it is also the world’s biggest consumer of oil, something that has caused the US to be a net importer in modern history. The country’s oil production is expected to continue, however, reaching 14 million barrels per day (bpd) in two years according to the EIA. In contrast, the country’s economy is expected to become more energy efficient. According to the EIA, oil consumption has already been declining since it peaked in 2004.
Longer term, oil companies with US upstream assets—such as the producers of Mobil and Castrol lubricant products, ExxonMobil and BP respectively—will continue to increase production until 2025. This will then stay broadly flat through to 2045.
The EIA acknowledges that shale operators will need to move to less productive areas in time, thus slowing production growth. It also notes that it has limited information about production rates and their sustainability because there is no historic data for these shale deposits.
The majority of US oil is expected to come from shale, however. The EIA’s reference case sees only 30% of total production coming from conventional sources, although new discoveries could drive offshore oil production to 2.4 billion bpd, a new record high, by 2026.