HEAVY IRON NEWS
IEA: In 5 Years, US Will Lead Production Gains
- By Design Team
- •
- 08 Mar, 2016
According to the International Energy Agency, the United States will lead the world in production gains by 2021. It's believed that both the United States and Iran will have tremendous production gains in both non-OPEC and OPEC countries, with Iran quickly increasing its oil production following the expiration of sanctions against the country's oil exports. Oil prices have been erratic throughout the globe, but this has done little to dissuade the advances made in the American oil industry, and has even improved upon efficiency throughout the oil and gas market.
SUPPLY AND DEMAND AMONG OPEC AND NON-OPEC PRODUCERS
Oil has reached record breaking lows in recent months, falling from over $100 a barrel in 2014 to under $30 a barrel in early 2016. This tremendous decrease in prices has destabilized the market, and has been mostly caused by a flood of cheap crude oil from OPEC countries. OPEC has been entering into negotiations to stop this increase in cheap oil, but Saudi Arabia has declined to slow its production, thereby fueling the lower prices in hopes of pushing North American oil production out of the market. Nevertheless, the United States has responded by creating cheaper, faster, and easier methods of producing oil. Hydraulic fracturing is one such method, that has been utilized to both increase production and lower production costs.
OPTIMISM WITHIN THE UNITED STATES OIL AND GAS MARKET
The United States has continued to produce large amounts of oil despite low per barrel costs. Though there may be an increase in general oil supply, there are also increases in demand; notably, China has been purchasing large amounts of cheap crude oil, and has been slowly switching away from coal. Oil and natural gas has many benefits over coal, which causes significant pollution. As the world moves away from coal, demand for both oil and natural gas may even out. Nevertheless, the oil market is and has been erratic, and oil producing companies within the United States market have been taking steps to prepare for further volatility.
POTENTIAL ISSUES LOOM AHEAD REGARDING IRAN AND ITS SANCTIONS
In addition to China's impact on the oil and gas market, it remains to be seen how Iran will affect the market. Iran is one of the biggest oil producing nations, but it has been crippled for some time due to the now expired oil sanctions, which have only been recently lifted. Following the initial lift of the Iran sanctions, oil prices fell to $28 per barrel. Whether or not the increased production from Iran will even out the decreased production from OPEC remains to be seen, though a significant amount of the price shortage was caused more by investor concerns than already increased supply.
The United States is certainly ramping up production, and companies within the United States are continually finding innovative and creative ways to recover profits regardless of oil prices. However, it does remain to be seen whether the price will continue dropping, which could lead to some significant challenges for those within the domestic oil and gas industry. Domestic companies will need to move forward with revolutionary new methods of oil production, such as hydraulic fracturing methods, in order to outpace foreign oil and keep the domestic economy strong. For more information about the oil and gas industry, contact Heavy Iron Oilfield Services today.
Subscribe to Email Updates
Recent Post
| A new project in development in Oman may be able to revolutionize the way that people think about solar energy and oil and gas. The Miraah project currently being developed will use solar power in order to produce oil, thereby reducing the amount of natural gas Oman residences will need to rely upon. Ideally, the Miraah project will be able to address many of the outstanding issues with solar technology related to energy capture, while creating a more efficient and effective method of oil production. |
Xodus Group, an international group of energy consultants, has now completed the first stage of its multiphase flow research project
, and is now entering the second. Multiphase flow is designed to research, simulate, and predict how dynamic forces act within the piping that is commonly used throughout the oil and gas industry, for a better understanding of the technology's potential improvements.
Reports have revealed that two-thirds of the natural gas in the United States are now coming from fracking
, thanks to the extensive shale gas resources and the proliferation of unconventional drilling throughout the country. Natural gas is increasingly being used throughout the globe as a more environmentally-friendly alternative to goal, and the domestic energy markets are seeing a significant reduction in utility costs.
As the oil and gas industry has been hard at work decreasing its oil production costs, the oil transportation industry has been similarly engaged. The need for oil transportation on a national and global level has been increasing alongside the need for oil throughout the world. As oil production ramps up in the United States, the old oil transportation methods have become insufficient and inefficient for the new volume of materials that need to be moved. New technologies are presently being developed to make it easier and faster to transport oil, thereby reducing overhead for the industry as a whole.
The Gulf of Mexico has been steadily increasing its oil production despite concerns regarding plummeting oil prices. In fact, production has increased enough that the Gulf of Mexico is expected to reach a record high in 2017. Many oil production companies and unconventional drillers have increased production throughout the United States rather than slowing down. Despite this, oil and gas remains a big and booming business.
