US to overtake Saudi Arabia as top oil producer

THE UNITED States is set to overtake Saudi Arabia as the world’s biggest producer of oil in two years, transforming the world market, according to a major energy organisation.

The US is now almost able to meet all of its own energy needs, according to yesterday’s annual outlook from the International Energy Agency (IEA), and will overtake Saudi Arabia as the largest oil producer in 2015.

The price of gas has also plunged for US consumers, which the report puts down to the recent surge in shale gas extraction.

Gas and industrial electricity prices are forecast to be twice as high in Europe and Japan than they are in the US, even until 2035.

But the IEA says the future of oil production still belongs to Organisation of the Petroleum Exporting Countries (Opec).

“We do not expect this trend will continue after the 2020s. It will come to a plateau and decline, as a result of the limited resource base of light tight oil,” said Opec’s chief economist Fatih Birol. “Afterwards, we need a substantial increase of middle east oil.”

The IEA also predicted a dramatic shift in energy demand over the next two decades, with developing Asia expected to match the EU for export market share in energy-intensive goods in 20 years, as energy consumption in populous India and China soars.

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