Over the next three years, oil production from the US will account for 80% of the world’s demand growth, with Canada, Brazil and Norway covering the rest, according to Oil 2018, the IEA’s five-year market analysis and forecast.

However the report says that despite falling costs, more investment will be necessary to ensure supply growth after 2020. The oil industry has not yet recovered from a record two-year drop in investment in 2015-2016, and the IEA sees little-to-no increase in upstream spending outside of the US in 2017 and 2018.

Namely, in the US, global oil demand will increase by 6.9 mb/d by 2023 to 104.7 mb/d. China remains the leader demand growth, but strict policies to reduce air pollution will slow growth. The launch of electric buses and LNG trucks will affect consumption of transport fuels more than the electrification of passenger vehicles.

Global oil production capacity is expected to increase by 6.4 mb/d to reach 107 mb/d by 2023. Because of the shale revolution, the US leads with total liquids production reaching nearly 17 mb/d in 2023, up from 13.2 mb/d in 2017. Growth is led by the Permian Basin, where output is expected to double by 2023.

Finally, almost all of the OPEC output growth comes from the Middle East. In Venezuela, oil production has decreased by more than half in the past 20 years, and declines continue. This affects gains in Iraq, resulting in OPEC crude oil capacity growth of just 750,000 barrels a day by 2023. Unless there is an important change to the fundamentals, the global spare capacity cushion will fall to only 2.2% of demand by 2023, the lowest number since 2007.

You can read IEA's Oil 2018, by clicking here