IEA Sees OPEC Market Share Growth in 2020 as Rivals Stagnate
OPEC’s share of the global oil market will expand from 2020 as prices recover to $80 and supply outside the group stagnates due to spending cuts, according to the International Energy Agency.
The Organization of Petroleum Exporting Countries’ share of global supply will remain steady at 41 percent until 2020 then rise to 44 percent by 2025, two percentage points higher than the IEA forecast a year ago. Production growth from countries not part of OPEC will slow over the next five years and halt by 2020.
OPEC’s decision last year to defend its market share rather than cut production to support prices has curbed growth of rival supplies like U.S. shale oil. While the resulting 40 percent slump in crude prices has “sharply” reduced the group’s revenues, the strategy will eventually prove beneficial for members that are able to increase output, the IEA said.
“Market opportunities seem to be open for countries that seek to expand their future production,” the Paris-based adviser to 29 nations said in its annual World Energy Outlook. “With higher-cost non-OPEC producers driven (by the lower price) to give ground,” the way is clear for Iran and Iraq to increase output, it said. (by Grant Smith, Bloomberg)