Oil production in 2023 will cross the 100 million milestone
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The restriction of oil production by the countries of the OPEC + agreement led to a revision of the forecast for growth in demand for it. This year, oil consumption will rise by 1.9 million barrels per day (b/d), which is 60,000 b/d less than expected in September, according to the October forecast of the International Energy Agency (IEA). According to experts, in the fourth quarter of 2022, demand will even decrease by 340,000 b/d year-on-year. In 2023, it could grow by 1.7 million b/d to 101.3 million b/d.
As follows from the IEA report, in September, the supply of oil increased by 300,000 bpd to 101.2 million bpd. Recall that from November, the OPEC+ countries are going to reduce the production ceiling by 2 million bpd. However, in October its actual volume was 3.4 million b/d below the quotas. Including the production of the Russian Federation below the quota by 1.3 million bpd, Nigeria – by 870 thousand bpd, Kazakhstan – by 500 thousand bpd. So the actual reduction could be about 1 million b/d, and it will be carried out primarily by Saudi Arabia and the UAE. “The OPEC+ decision will not allow stockpiling next year,” the IEA notes. They do not expect that US shale production will be able to compensate for this reduction.
As a result, the global oil supply this year may increase by 4.6 million b/d compared to last year, to 99.9 million b/d, of which 3 million b/d will come from OPEC+ countries. The US will increase production by 1.1 million b/d. The growth next year, according to the IEA forecast, will be only 760 thousand b/d, but at the same time, the volume of supply will reach a record 100.6 million b/d, the increase will be provided primarily by non-OPEC+ countries (they will be able to increase production by 1.8 million b/d).
The volume of Russian production in September, according to the IEA, did not change compared to August and amounted to 9.7 million bpd. Taking into account condensates – 11.1 million b/d, which is 130 thousand b/d higher than in August, but 310 thousand less than before February. Russian oil exports in September fell by 230,000 bpd to 7.5 million bpd, which is 560,000 bpd less than it was before the start of the military operation in Ukraine. Revenue from oil exports fell by $3.2 billion to $15.3 billion. An additional restriction of supplies is expected in December, after the EU embargo on Russian oil imports comes into force. Average annual production is expected to drop to 9.5 million b/d in 2023 from 10.9 million b/d in 2022.
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