PARIS, May 14 (Xinhua) -- The supply shock caused by the North American oil production booming in the next five years will not only have impact on global investment but also reshape transportation, storage and refinery of oil, the International Energy Agency (IEA) said Tuesday.
"North American supply growth now looks higher than expected in both absolute and relative terms," and it "has set off a supply shock that is sending ripples throughout the world," said IEA Executive Director Maria van der Hoeven while launching IEA'S annual Medium-Term Oil Market Report (MTOMR).
The MTOMR forecasts North American supply to grow by 3.9 million barrels per day (mb/d) from 2012 to 2018 and world liquid production capacity is expected to grow by 8.4 mb/d, "significantly faster than demand which is projected to expand by 6.9 mb/d," said the IEA.
The IEA noted that the new supply does not spell the end of OPEC and its oil will be necessarily needed.
"It will remain an essential part of oil mix for as long as we can tell," said Hoeven, adding that challenges is laying ahead as the bloc is exposed to risks of political uncertainty in North Africa and the Middle East that will have negative impact on oil production growth in those areas.
However, the IEA chief sees the ongoing North American hydrocarbon revolution as a "game changer", not just because of the volumetric growth involved, "but for a host of compounding reasons," given a few factors such as crude quality, infrastructure requirements, current regulations, and the potential for replication elsewhere that are bound to spark a chain reaction that will leave few links in the global oil supply chain unaffected.
"Although shale oil development outside North America may not be a large-scale reality during the report's five-year timeframe, the technologies responsible for the boom will increase production from mature, conventional fields, causing companies to reconsider investments in higher-risk areas," the IEA said.
In addition, the IEA report predicts global refining capacity to grow even faster by reaching 9.5 mb/d in the coming years.
It noticed that "surge in non-OECD refining capacity shakes up product market," and are accelerating a broad restructuring of the global refining industry and oil trading patterns, and will see part of developing countries in Asia and the Middle East becoming the new leading player in global refining industry.
The MTOMR report projects that oil demand is stronger in developing countries rather than in the developed. There is also strong evidence that African oil demand has been routinely underestimated, and may grow by a further 1 mb/d over the next five years.
"African economies will play a larger role in the global market than previously expected," the report added.
Neverthless, the MTOMR judges that market fundamentals suggest a more comfortable global oil supply-demand balance over the next five years.
The IEA concludes that in the next five years emerging economies and developing countries will consolidate their rise in every aspect of the oil market.
In general terms, this new edition of IEA forecast is consistent with the last MTOMR released in October, 2012, that saw the North America as the leader in oil supply in future.
The MTOMR is part of a series of medium-term forecasts that the IEA devotes to each of the main primary energy sources, oil, gas, coal and renewable energy, and, starting this year, energy efficiency.