Saudi Arabia’s energy minister took a rare sideways swipe at the International Energy Agency on Wednesday, accusing the body of overhyping the impact of US shale growth on the oil market. In a retort to remarks by IEA head Fatih Birol, Khalid Al Falih said at an energy panel in Davos that the agency was failing to put the scale of US production increases into context. “I was not disputing the amazing revolution of shale . . .[but] in the overall global supply demand picture it’s not going to wreck the train,” said Mr Falih. “We should not be scared,” he added, at the World Economic Forum’s annual conference on Wednesday.
“That’s the core job of the IEA, not to take it out of context.” Mr Falih appeared alongside his Russian counterpart Alexander Novak and US energy secretary Rick Perry, who together now represent countries pumping more than a third of the world’s crude. The appearance of a US representative on a panel of traditional producer nations illustrates the transformative effect the shale boom has had on global energy markets.
The IEA said last week US crude production was on course to overtake Saudi Arabia and rival Russia, with the body revising 2018 growth forecasts for the US higher to output of more than 10m b/d. The Paris-based body stressed that “explosive” expansion in shale was offsetting Opec-led supply cuts, a fear held among many countries participating in a deal to curb production that stared in 2017. Mr Falih argued that rapid global oil demand growth and natural decline rates at existing fields meant greater supplies would be needed, adding there was an “oversized focus” on US shale growth.