Much like the Energy Information Administration annual report released in December that pegged the United States’ crude-oil production approaching its all-time record high in the next few years, the International Energy Agency is reporting that U.S. production has been drastically exceeding erstwhile expectations and could be very well-poised to take advantage of steadily rising global demand — provided the government make a few clutch regulatory changes in short order, via CNBC:

The United States continued its “relentless rise” in crude oil production in 2013, exceeding even the most bullish of expectations, the International Energy Agency (IEA) reported on Tuesday.

…[T]he IEA noted that U.S. crude output for 2013 outstripped its projections from a year ago by around 455 kb/d, and noted that “U.S. crude oil supply in 2013 registered the fastest absolute annual supply growth of any country in the last two decades, rising 15 percent in 2013.”

This helped blunt the impact of supply declines elsewhere, notably Libya and Iran.

…[T]he IEA raised the issue of the looming crude ‘wall,’ the point at which regulations would limit the U.S. market’s capacity to absorb production growth. For example, the U.S. ban on exports of crude oil to countries other than Canada could have an impact on growth in production.

We’ve managed to accommodate our until-recently unexpected oil-and-gas boom by rapidly expanding our refinery, pipeline, and railroad capacities, as well as exporting more oil to Canada (to which our current crude-export ban doesn’t apply), but there’s only so much more production growth our infrastructure can absorb before it eventually hits the limitations of our self-restricted market. If we don’t revise our regulations for freer trade pretty soon, we may be looking at a major glut situation:

Because the U.S. has been the world’s largest importer of oil for decades, American refineries are predominantly fitted to refine the heavy lower-quality crude imported from Mexico, Venezuela and the Middle East rather than the sweet-light domestic crude. As a result, analysts are forecasting that by July 2014, the U.S. refineries will reach their limits to process excessive crude oil.

… A continuous increase in oil production, coupled with the lack of political will to relax oil export laws, might bring a significant drop in domestic oil prices and could prove disastrous for the industry, already burdened with very narrow profit margins and fierce competition. Extracting oil from shale is an expensive business, and to be profitable, U.S. shale oil producers need the price of oil to stay above $80 to $90 a barrel.