Part of the Western world is underestimating the importance of the Middle East as a result of the shale revolution in the United States but this may be too hasty a reaction, according to the chief economist of the International Energy Agency (IEA).
In an exclusive interview with FuelFix, Fatih Birol commented that predictions that the United States will overtake Saudi Arabia as the largest producer of oil in the world may be true but assuming that this is going to diminish the significance of the region is misleading and should be considered wrong from an economical and political point of view because the consequences of such a claim may be "substantial."
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According to Birol, it may result in diverting investments for new oil fields exploration away from the Middle East, which may have a negative effect on the oil industry in the long run. Chances are, growth from that part of the world will be needed over the years to come, he explained.
In November 2013 the IEA estimated that U.S. oil production would surpass that of Saudi Arabia in 2015 but this does not change the fact that the Middle East countries will still play a major role on the global oil market, Birol said. If exploration for new oil fields is hindered, there would be no way to meet the increase in global oil demand, especially in Asia, he concluded.