US Shale to Peak at 14.5Mbpd in 2030

US shale supply will peak at approximately 14.5 million barrels per day (bpd) around 2030, said the energy research and business intelligence company Rystad Energy.

In the past decade, crude oil coming from shale patches such as the Permian in the US has grown from a negligible contributor to an upstream behemoth, reshaping the industry and the oil market.

US Light Tight Oil (LTO) represented less than 1% of global oil supply just nine years ago. Today, US LTO represents close to 10% of total global oil supply, a percentage which is expected to continue its ascent going forward. But by how much? That is the million-dollar question.

Different agencies and knowledge houses have responded to this with varying degrees of positivity and skepticism. Rystad Energy aims to shed some light on this uncertainty and provide its answer.

“Under our base-case price scenario, US LTO supply should reach its peak at approximately 14.5 million barrels per day (bpd) around 2030,” says Sonia Mladá Passos, a product manager on Rystad Energy’s Shale Upstream Analytics team.

Assuming a flat $45 per barrel (bbl) WTI scenario, Rystad Energy estimates that LTO supply would once again peak in 2030, but at a more modest 11.5 million bpd. For our prediction to be as low as other institutions’, the oil price would have to drop sharply.

“Based on our analysis, the oil price would need to be as low as $42 per barrel WTI going forward for the 2030 US LTO supply to be as low as EIA presents in their Reference case,” Passos remarked.

There is a consensus in the market that the Permian Basin will be the dominant part of 2040 US oil supply. What varies, however, is the view on how large that supply is going to be.

“Our forecast is the most bullish – in Rystad Energy’s base case price scenario we expect Permian’s production to grow to around 7.5 milion bpd by 2040,” Passos remarked.

To better depict where the growth in our forecast comes from, Rystad Energy splits the overall production forecast for US LTO by life cycle.