Surging demand for oil from emerging markets will increasingly be met by non-Opec supply, according to the International Energy Agency (IEA).
Use of crude in developing economies will outstrip oil consumption in member countries of the Organisation for Economic Cooperation and Development for the first time this quarter, the agency predicted in a report released yesterday.
But crude will increasingly be supplied from producers outside Opec, as the organisation struggles to ramp up production capacity against the backdrop of political instability.
At the same time, US production will grow faster than anticipated, driven by the boom in unconventional oil and gas.
"Together, these powerful forces are redefining the way oil is being produced, processed, traded and consumed around the world," the IEA said in its in its annual medium-term oil market report (MTOMR).
"There is hardly any aspect of the global oil supply chain that will not undergo some measure of transformation over the next five years, with significant consequences for the global economy and oil security."
Demand for crude from non-OECD countries, notably China, is projected at 44.9 million barrels per day (bpd) in the second quarter of this year by the IEA, slightly above the 44.6 million bpd expected to be used by developed economies.
"This has been a trend in motion for several years now, since China came into the frame back in 2004," said Amrita Sen, the chief oil analyst at Energy Aspects.
New extraction techniques are pushing production in North America to new heights. Hydraulic fracturing, or fracking, has already swamped the United States and Canadian natural gas market with additional supply, and oil production is starting to follow suit.
US oil is expected to make up half of the additional 6 million bpd non-Opec oil that will flow into the market by 2018, according to the IEA.
The agency predicts that Opec capacity will rise by 1.75 million bpd to 36.75 million bpd in this period, which is 750,000 bpd less than it had forecast in last year's report.
"The balance of global supply growth, more or less evenly split between Opec and non-Opec in the 2012 MTOMR, is tilting towards the latter," said the IEA.
It also said capacity increases in Saudi Arabia and Abu Dhabi would be offset by political risk in North and West Africa in the aftermath of the Arab Spring, which will discourage international oil companies from investing in additional production. Projects have already been delayed in Algeria, Libya and Nigeria, noted the agency.
An effective international sanctions regime is expected to lower production in Iran by about a third by 2018. Iraq, which the IEA believes will probably double its capacity to 6 million bpd by 2020, will take longer than previously anticipated to boost its production.
In spite of stunted capacity growth, Opec will continue to play an important role in the oil markets, says the IEA, which positions itself as the organisation representing the interests of oil-importing countries.
"Opec will still very much be needed. The new supply will not spell the end for Opec," said Maria van der Hoeven, the IEA executive director.
According to the IEA's monthly report, also released yesterday, Opec raised its production by 200,000 bpd to 30.7 million bpd in April. The 2013 call on Opec, or demand for the organisation's crude, was revised down by 400,000 bpd to 28.9 million bpd as non-Opec production rises.