Middle East to continue to be main oil supplier

Middle Eastern countries will continue to be world's main oil supplier, says IEA chief economist

Middle East to continue to be main oil supplier
World Bulletin / News Desk
 
The Middle East will continue to preserve its predominance in oil supply despite the increasing shale oil production in the U.S., says a chief economist of the International Energy Agency on Monday in Istanbul.

Speaking at the World Energy Outlook 2014 Turkey launch conference, Fatih Birol, said the total oil demand by 2040 would increase by 14 million barrels per day, to 107 million, and that a large part of this demand would be met by Middle Eastern resources.

"The idea suggesting that the shale oil in the U.S. changed everything and that there is no further need for oil production in the Middle East is completely wrong," said the Turkish economist.

The energy expert said the maximum increase in U.S. shale oil would reach 2 million barrels per day, which would not be sufficient in meeting overall global demand, since the U.S. itself still remains an oil importing country.

Birol also stressed that the cost of oil drilling per barrel was too high in the U.S. compared to the Middle East as it can reach $75 against $5 in Middle Eastern countries. 

It is the turmoil in Iraq that endangers the necessary supply to meet the increase in global oil demand, according to Birol. 

"There has to be a major increase by the 2020s and the investment for more production should start today. However, it is not possible due to the political instability," said Birol.

Iraq, which Birol sees as the most important country for the surge in oil production, has been struggling due to the conflict with Islamic State of Iraq and the Levant militants. Birol also mentioned Africa as an important player in the future since a third of oil and natural gas discoveries in the last five years have occurred on the continent,  

Birol also said the oil prices would rise in the near future. They had slumped by almost 50 percent in the second half of 2014.

A reason for the slump was the demand in China, which declined due to slower growth and this trend is expected to continue according to 2040 projections, Birol stated.

Birol listed as causes Chinese policies over energy efficiency, the moving away from energy-hungry industries and a decrease of its population. 

 

Güncelleme Tarihi: 22 Aralık 2014, 17:46
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