Booming oil production in North America driven by the shale energy revolution has created a global "supply shock" that is reshaping the industry, the International Energy Agency said on Tuesday.
"North America has set off a supply shock that is sending ripples throughout the world," said IEA Executive Director Maria van der Hoeven while presenting the agency's five-year outlook for the oil market.
The shale oil and gas boom has become the gold rush of the 21st century, with tens of billions of dollars in revenues and hundreds of thousands of new jobs in places as remote as North Dakota, in the Great Plains of the United States.
"A mature economy which some 150 years ago had been the cradle of the oil industry, but had since faced what seemed like an irreversible production decline, (has) all of a sudden found itself at the centre of a new oil boom," the IEA said.
The boom has created a brand new energy supply in a development that "will be as transformative to the market over the next five years as was the rise of Chinese demand over the last 15."
While Canada has long been a major energy exporter, the rise of shale-based hydrocarbons has meant a crucial change for the United States, which could move from the being world's leading importer of oil to a net exporter within the next few years.
An IEA forecast in November had already made headlines in forecasting that the United States would become the world's biggest oil producer by 2017 thanks to shale energy.
But the some of extracting methods behind the boom have proved controversial, with environmentalists worried they pose a major threat to the environment and may even trigger earthquakes.
On the back of this unconventional output, the IEA said it expected North American supply to grow by 3.9 million barrels per day (mbd) from 2012 to 2018, or nearly two-thirds of total forecast non-OPEC supply growth of 6.0 mbd.
But North America was "just one part of the story" the IEA said as production capacity in traditional OPEC suppliers in the Middle East will continue to grow in the next five years, "though adversely affected by growing insecurity in North and Sub-Saharan Africa" in the wake of the Arab Spring uprisings.
OPEC capacity, which counts for 35 percent of today's global oil output, is expected to gain 1.75 mbd to 36.75 mbd in 2018, about 750,000 barrels per day less than under a 2012 forecast
"In virtually every other aspect of the market, developing economies are in the driver's seat," the IEA said with non-OECD economies overtaking OECD nations in terms of oil demand for the first time this quarter.
"The demand trend for the OECD appears entrenched in a long-term structural decline which is expected to persist through the forecast," the report said with non-OECD demand estimated to rise from 49 percent of global demand in 2012 to 54 percent in 2018.
The IEA, an OECD offshoot that tracks the energy market for the world's industrialised nations, meanwhile raised marginally its earlier outlook for global oil demand growth in 2013 to 90.6 mbd.
The forecast for non-OPEC supply in 2013 meanwhile was raised 50,000 to 54.5 mbd due to strong output in North America.