U.S. forecast to become world's top oil producer

An oil drill in Taft, Calif. David McNew/Getty Images

The United States will become the world's largest oil producer by around 2020, temporarily overtaking Saudi Arabia, as new exploration technologies help find more resources, the International Energy Agency forecast on Monday.

In its World Energy Outlook, the energy watchdog also predicted that greater oil and natural gas production - thanks partly to a boom in shale gas output - as well as more efficient use of energy will allow the U.S., which now imports some 20 percent of its energy needs, to become nearly self-sufficient around 2035.

"Energy developments in the United States are profound and their effect will be felt well beyond North America -- and the energy sector," the agency said in the report. "The recent rebound in U.S. oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity -- with less expensive gas and electricity prices giving industry a competitive edge -- and steadily changing the role of North America in global energy trade."

That is "a dramatic reversal of the trend seen in most other energy-importing countries," the Paris-based IEA added.

For example, oil exports out of the Mideast will increasingly go to Asia as the U.S. becomes more self-sufficient. That will increase the global focus on the security of strategic routes that bring Middle East oil to Asian markets. Tensions between Iran and Western powers have raised concerns that oil exports from the Persian Gulf could be blocked in a potential conflict over Tehran's alleged plan to develop nuclear weapons.

The IEA added that global trends in the energy markets will be influenced by some countries' retreat from nuclear power, the fast spread of wind and solar technologies and a rise in unconventional gas production.

The agency concluded that despite the rising use of low carbon energy sources, huge subsidies will keep fossil fuels "dominant in the global energy mix."

"Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable path," the IEA said.

Global energy needs are forecast to increase by a third by 2035, with 60 percent of the additional demand coming from China, India and the Middle East.

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