BAKU, Azerbaijan, December 17. Global oil supply for the whole 2022 is forecast to increase by 4.7 million barrels per day (mb/d) year-on-year to 100 mb/d, Trend reports via the latest oil market update from the International Energy Agency (IEA).
"World oil supply fell 190 kb/d in November to 101.7 mb/d, breaking a five-month uptrend, after Saudi Arabia and other Gulf countries curbed supply in line with lower OPEC+ output targets. A steeper drop is expected next month as the EU ban on Russian crude imports and the G7 price cap take effect," the report said.
According to the forecast, a steeper decline is expected this month, as the EU ban on Russian oil imports comes into effect, along with the restriction of G7 export prices and weakening production by non-OPEC+ countries.
For its part, OPEC+ at its meeting on 4 December agreed to adhere to the - so far - sharply reduced supply ceiling, which is valid from November to 2023. In fact, only Saudi Arabia and its Persian Gulf neighbors will continue to pump significantly lower quotas or bypass them, as most of the bloc’s countries have under-priced targets for some time. Despite OPEC+ constraints and a further expected decline, mainly from Russia, global output is projected to exceed demand by the end of 2022 and the first quarter of next year.
Meanwhile, Saudi Arabia is expected to rank as the single largest source of oil supply growth globally in 2022, with an increase of 1.6 mb/d, boosting production to an annual record rate.
"The US is expected to contribute 1.2 mb/d, lifting total oil output to an all-time yearly high. Russia, prior to its invasion of Ukraine, was also expected to pump at unprecedented levels, but is now projected to post only marginal growth of 180,000 b/d. The OPEC+ bloc is forecast to expand by 3 mb/d, including the outsized Saudi contribution. The anticipated gains of 1.7 mb/d for non-OPEC+ are dominated by the US. Solid increases are also expected from Canada, Guyana and Brazil, which is set to reach record-setting annual production," the IEA said.