Peak tight oil supply, mainly from North America, will constitute 15 per cent of all global output by the late 2020s, Opec said in its annual World Oil Outlook report.
The exporters’ group has revised its projection for the medium-term upward for the growth of US shale, which is expected to rise by 8.6 million barrels per day between 2017 and 2023.
Healthier demand outlook and higher oil prices supported shale’s buoyancy.
Oil prices have performed at an average of $72 per barrel this year, ending a three-year price slump that resulted in a massive decline in global investment in the hydrocarbons sector. Opec estimates that $11 trillion worth of investment is required in the upstream sector between 2018 and 2040.
Such investment however, “will require a supportive price environment, as well as the necessary regulatory and fiscal framework”, the report said.
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The organisation said that returning upstream investment activity will be on par with spending observed in the late 2000s, when high $100 oil price levels triggered a boom in the US tight oil supply.
The exporters’ group, which is expected to expand to include new sovereign members, also remained bullish on the prospect of global crude exports from the Middle East to the Asia Pacific, which it pegged around 5.5m bpd.
Opec also expects the petrochemicals sector, which is receiving significant investment in oil-producing countries of the Middle East, to mark the biggest increase in demand for oil.
“Demand forecast [in the petchems industry is expected] to increase by 4.5m bpd from 2017 to 2040,” the report said.
In terms of geographical demand, India is projected to see the largest additional oil demand, which will grow up to 5.8m bpd by 2040, according to Opec.
