Challenges for Oil Trade Outlined in International Energy Agency Report
The USA is pointed out as the leader in world oil markets over the next decade in the annual Medium-Term Oil Market report published by the International Energy Agency on Tuesday.
In the light of economic sanctions against Russia on world markets, the country is prognosed to resort to contracting many of its capacities.
The report also makes a point that the new price low for oil will not cause an excessive increase in demand, as a number of analysts expected.
Demand is however forecast to expand to 5.2 M barrels per day by 2020. Meanwhile, oil producers have been decreasing their spending in order to be able to respond promptly to any market fluctuations.
IEA Executive Director Maria van der Hoeven further stated the importance of shale oil extraction on international oil trade markets. She explained that the US light and tight oil ( shale oil) production is the reason for its market leadership.
"OPEC's move to let the market rebalance itself is a reflection of that fact,'' she added.
Additionally, OPEC crude oil production is also projected at no more than 200,000 barrels per day per year. The limit is set by the international economic sanctions Iraq currently holds.
Currently, the OPEC is comprised of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
Meanwhile, non-OPEC countries are expected to be more susceptible to market fluctuations as growth in the growth of the sector demand is projected to be slightly faster than the supply capacities.
Additionally, political risk in providing supplies in several regions of the world will remain a factor of growing importance in business decision-making.