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The Iran-driven run in oil prices to the highest since 2008 masks the Middle East producer’s diminishing importance to global oil supplies as record spending on drilling unearths reserves from Argentina to Angola.

New fields will ease pressure on prices, according to the Centre for Global Energy Studies. Futures show investors expect benchmark Brent crude to drop to less than $100 a barrel in 2015 from $125 today. Global exploration spending, led by Exxon Mobil Corp. (XOM) and Royal Dutch Shell Plc (RDSA), will jump 20 percent this year to at least $90 billion, Barclays Plc research shows.

Offshore drilling may unlock about 25 billion barrels of oil this year, more than four times Norway’s remaining reserves, according to Morgan Stanley. In addition, there are so-called unconventional fields in the U.S., where oil production from North Dakota’s shale rose 75 percent last year, and Argentina, home to a field found by Repsol YPF SA (REP) that may hold about 23 billion barrels.

“The price of oil has to come down because supply prospects are so positive,” said Manouchehr Takin, an analyst at the Centre for Global Energy Studies. “The rate of demand isn’t going to grow as in the past as we use resources more efficiently.”

The International Energy Forum, consisting of a group of nations that account for more than 90 percent of global oil and gas supply and demand, gathers today in Kuwait as pressure builds on Iran from U.S., the European Union and Israel to end its nuclear research program. The forum was founded in 1991 to discuss international energy security.

Largest Consumer

Saudi Arabian Oil Minister Ali al-Naimi and U.S. Deputy Energy Secretary Daniel Poneman, representing the world’s biggest crude exporter and the largest consumer, are joining ministers from more than 70 countries to discuss how to meet future energy demand and mitigate price volatility. Executives will attend from companies including Exxon, Shell and Total SA. (FP)

“Even now the market is well-supplied,” Aldo Flores- Quiroga, the IEF’s secretary-general, said in an interview in Kuwait yesterday. “New fields are being discovered. There are new areas where sources are being developed. The sources of supply are spreading and this will change the politics of oil.”

Concern that a strike against Iran will start a Middle East war has driven oil prices higher and exploration can’t do much to mitigate that in the short term, said Colin Lothian, corporate strategy analyst at Wood Mackenzie Consultants Ltd. The European Union will stop buying any Iranian oil from July 1.

OPEC Pumping

The Organization of Petroleum Exporting Countries, which supplies 40 percent of the world’s oil, is pumping the most in three years and crude surpassed $120 a barrel on Feb. 20 for the first time since May. The average price of OPEC’s main crude grades has surpassed $120 a barrel since Feb. 22, the longest stretch since 2008.

“It takes four to eight years from exploration to bringing supply on the market, so new discoveries won’t have a material impact on supply for a few years,” Lothian said in an interview. “Concerns in the market are different, about potential disruption in supply.”

Still, the underlying supply and demand picture may be more balanced. OPEC cut its global oil demand forecast for 2012 on March 9 by 130,000 barrels a day to 88.63 million on moderating prospects for global growth.

The forward curve for Brent crude, the benchmark for two- thirds of the world, shows prices dropping to $112 by the end of next year and to about $95 in December 2016.

Brent crude for April settlement on the London-based ICE Futures Europe exchange was up 58 cents, or 0.5 percent, at $125.92 as of 9:35 a.m. local time.

Less Important

Iran is becoming a less important global supplier. The second-largest OPEC producer will see its share of oil production slip from 4.9 percent in 2010 to 4.5 percent in 2015, according to the International Energy Agency.

Spending on oil and gas exploration rose to a record $72 billion last year, according to Wood Mackenzie, as drillers look to replace aging fields with finds in countries with little or no history of oil production.

“We are seeing a wave of new exploration activity,” said Robin Batchelor, the manager of Blackrock Inc.’s $4.5 billion World Energy Fund. “The majors are beginning to increase their exploration budgets and have become more interested in some of these frontier plays.”

Shell, based in The Hague, is increasing spending on exploration 35 percent to about $5 billion this year. London- based BP Plc (BP/) is doubling exploration drilling this year and is stepping up spending on projects in Angola, the North Sea and the Gulf of Mexico.

Exxon Expects

Exxon expects to start up nine major projects this year and next and anticipates adding the equivalent of more than 1 million net barrels a day by 2016. The company’s 2012 exploration portfolio includes projects in Tanzania, Guyana and Ireland, according to a March 8 investor presentation.

Smaller explorers are making important discoveries also. Tullow Oil Plc (TLW) last year discovered oil in French Guiana that may double its $4.4 billion economy. Cobalt International Energy Inc., backed by Goldman Sachs Group Inc., last month confirmed a 1,180-foot column of oil in waters off Angola.

The U.S. may surpass Russia as the world’s largest energy producer in the next 10 years as output of natural gas and crude from shale rock formations climbs, Pacific Investment Management Co.’s Mark Kiesel said last month.

China, the world’s biggest energy consumer, is estimated to have more gas trapped in shale than the U.S. and plans a second auction of shale exploration areas as it seeks to triple its use of gas to 10 percent by 2020.

“The world has become a very exciting place for energy and there are possibilities everywhere,” B.C. Tripathi, chairman of GAIL India Ltd. (GAIL), the country’s biggest natural-gas distributor, said in a telephone interview on March 7. “Our options to get oil and gas now range from America to Australia.”

Bloomberg, 13 March 2012