REPORT: The world will increasingly turn to North America for oil
An oil platform off the coast of Louisian.
STEVE CHIOTAKIS: The International Energy Agency said today global demand for oil will be higher than what they earlier thought. That means prices are likely to stay high for a while. Saudi Arabia has promised to step up production for now but who's going to produce oil in the years to come?
Marketplace's Jeff Horwich is here with one answer that has people talking this morning. Hi Jeff.
JEFF HORWICH: Good morning Steve.
CHIOTAKIS: All right, if we need more oil, wouldn't option number one be the Middle East?
HORWICH: You might think so, and it's not like the Middle East and other OPEC countries are about to run out of oil. But Samuel Ciszuk of IHS Energy says while the Saudis have some room to grow, the oil economies have mostly tapped what there is to tap.
SAMUEL CISZUK: If you look beyond Saudi Arabia, there are very few countries in OPEC which actually have anything of signifiance to offer over the long term.
What we need, according to the International Energy Agency, is new discoveries, and new exploration -- and much of that will be here, in the U.S. and Canada.
CHIOTAKIS: What makes them think North America is going to step up and start supplying more of the world's oil?
HORWICH: High prices and that's what completes the logic here. IEA director Nobuo Tanaka said this morning we can expect $100-a-barrel prices for a while.
NOBUO TANAKA: Oil markets have seen surging demand growth in emerging markets, outstripping growth in supply and pushing prices higher.
High prices make our more expensive ways of getting oil more attractive. For the U.S., that means exploration in Alaska and the Gulf of Mexico. For Canada, it means extracting oil from the so-called "oil sands" in Alberta.
CHIOTAKIS: All right, Marketplace's Jeff Horwich reporting for us this morning. Jeff thanks.
HORWICH: You're welcome.
STEVE CHIOTAKIS: Oil's trading at about $94 a barrel today. Saudi Arabia is moving ahead with plans in the near-term to increase supply and help keep prices in check. But a new report this morning says the longer-term answer to meeting global oil demand will not come from the Middle East. But rather, North America.
Marketplace's Jeff Horwich reports.
JEFF HORWICH: The International Energy Agency says a stronger and faster-than-expected economic recovery in China and India is pushing global oil demand up. It expects prices to stay on the high side around $100 a barrel.
The IEA's David Fife presented the report this morning in St. Petersburg.
DAVID FIFE: We basically see a tighter oil market than we were expecting. Higher prices are prompting a response from the supply side.
The higher price of oil means more expensive ways of producing it start looking more attractive -- and this is where North America comes in.
Oil analyst Samuel Ciszuk with IHS Energy says most Middle Eastern and OPEC countries are running out of spare supply. But the U.S. and Canada have some options.
SAMUEL CISZUK: In the U.S. it is continued development of the Gulf of Mexico, but also potentially new frontiers being targeted for exploration in arctic zones and so on.
In Canada, the IEA predicts the environmentally contentious process of oil sands mining will be a critical part of meeting global demand.
I'm Jeff Horwich for Marketplace.