The International Energy Agency’s (IEA) latest global oil outlook, released on Monday night, predicts America’s oil and gas boom will see it become a net exporter by 2021 with profound implications for global politics.

US oil production, including gas, is slated to jump by more than a quarter from last year’s rate to 19.6 million barrels a day by 2024.

“The second wave of the US shale revolution is coming,” IEA executive director Fatih Birol said.

“It will see the United States account for 70 per cent of the rise in global oil production and some 75 per cent of the expansion in LNG trade over the next five years. This will shake up international oil and gas trade flows, with profound implications for the geopolitics of energy.”

The miner bought its shale assets for $US20 billion ($28 billion) at the height of the oil boom, investing another $US20 billion to expand operations. It was briefly the group’s second-largest earner after iron ore but the start of the oil crash in 2014 wiped out most of its value, prompting BHP to divest the underperforming asset.

For the last two years, the Organisation of Petroleum Exporting Countries (OPEC) has been actively slashing their oil production levels in order to drive up prices after they dropped to a low of $US26 a barrel in 2016.

This helped the oil price recover to a four-year high of $US86 a barrel in 2018. The petrol price rose alongside it, hitting a 10-year high in October last year.

Australian Competition and Consumer Commission (ACCC) chairman Rod Sims said the cuts to global supply levels have hit Australians directly in the pocket.

“The dominant reason the petrol price is high is because of the OPEC cartel,” Mr Sims said. “Our petrol price is completely driven by OPEC.

“The good news is that the US is disrupting this with shale oil.”

Commonwealth Bank associate director for mining and commodities Vivek Dhar said if oil prices fell due to US output then prices at the bowser could drop.

“Any supply increase is only going to be a negative to oil prices and lead to lower petrol prices,” Mr Dhar said.

“However, OPEC’s strategy has been to restrain oil supplies in order to keep the market balanced and prices stable. We expect OPEC and Russia will continue their cuts to stop an oil oversupply.

“It’s a game that can be self-defeating though, as OPEC keeps the price higher which only encourages US producers to increase output.”

CommSec data forecasts petrol prices will rise in the coming weeks due to a discounting cycle in the domestic market.

“Petrol prices are edging higher, with the national average unleaded pump price likely to hold near $1.35 a litre,” CommSec economist Craig James said.

In the wake of the IEA announcement, UBS has lowered its oil price forecasts for 2019 by $US2.75 down to $US65.75 a barrel and down by $US1 to $US72 a barrel for 2020.

“We expect oil prices of $US70 a barrel to be sustained throughout 2022 to 2024,” UBS analyst Glyn Lawcock said.

Extracted from Sydney Morning Herald