Birol said low oil prices have cut oil investment by about 40 per cent
in the past two years, with sharp falls in the United States, Canada,
Latin America and Russia, and the world's reliance on Middle East oil
will accelerate substantially in the next few years.
"This year, we are expecting the biggest decline in non-Opec oil supply
in the last 25 years, almost 700,000 barrels per day. At the same time,
global demand growth is in a hectic pace, led by India, China and other
emerging countries," he told reporters after meeting Prime Minister
Shinzo Abe in Tokyo.
"At the turn of this year or latest 2017, we expect oil markets to
rebalance and the prices to rebalance. When we look at all the
fundamentals - demand, supply and stocks - I have all the reasons to
believe that in the absence of a major economic downturn we are going to
see balance in the markets latest by 2017."
Birol said conditions were difficult for shale oil producers despite a recovery in Brent oil prices to above $45 a barrel.
"I think $45 is a bit of a relief for all the oil producers around the
world, but this is still far lower than to make the entire shale oil
production profitable for the United States."
He also said Iran's crude oil exports could rise by half a million
barrels per day this year after Western sanctions against the country
were lifted.
"In general we think Iran could bring, if all the conditions are
appropriate, about 500,000 barrels per day to the markets," he said.
Iran is determined to recover its share of the world oil market, and
can withstand low prices since it has sold oil for as little as $6 a
barrel in the past, a source close to Iranian oil policy said. Reuters
