The vast majority of shale oil in the US is produced at costs far below the current price of crude, the head of the west's energy watchdog said, which means US projects can withstand the market slump squeezing other producers.

Brent oil stands at around $88 per barrel, down more than 23 per cent from the year's peak above $115 in June, raising concern that some shale oil projects will become un-economical.

However, Maria van der Hoeven, executive director of the International Energy Agency (IEA) said only a tiny minority of shale oil production would be affected by the slump in prices to near-four-year lows.

"Some 98 per cent of crude oil and condensates from the US have a breakeven price of below $80 and 82 per cent had a breakeven price of $60 or lower," she told Reuters in an interview on the sidelines of the launch of the Africa Energy Outlook publication.

Saudi Arabia is quietly telling oil market participants that Riyadh is comfortable with markedly lower oil prices for an extended period, a sharp shift in policy that may be aimed at slowing the expansion of rival producers including those in the US shale patch.

Some Opec members are clamouring for urgent output cuts to push global prices back up above $100 a barrel as they rely heavily on oil exports to balance their budgets, but others like the Saudis are thought to be more relaxed.

Van der Hoeven said the fall in the oil price would provide a welcome economic boost for economies which are heavily reliant on oil imports.

"We've noted more than once in the past years the relatively high price of oil really places a burden on oil consumers. What we see now with these much lower prices, for consumers it will be a welcome relief."

However, she added that it could make life more difficult for exporters who rely on income from oil sales.

"It's a benefit for the global economy but it might have some consequences," she said. "The recent price drop will present some challenges for those producers who base budget assumptions on oil prices above $100 per barrel."

The IEA's monthly Oil Market Report, which will give further insight into the agency's analysis of the current demand outlook is due out on Tuesday.  - Reuters