BP: Global oil demand up 1.5 mbpd over 3 years (UPDATE)

Details added (first version posted at 15:25)

Baku, Azerbaijan, Nov. 7

By Huseyn Veliyev - Trend:

The global demand for oil over the past three years has increased by 1.5 million barrels per day, chief economist of BP in Russia and the CIS, Vladimir Drebentsov, said in a meeting with reporters on Nov. 7.

“The demand for oil is growing at a rate of one and a half times faster. This is due to a variety of factors. First of all, it is the result of lower prices. Oil prices for last three years were lower than in the previous period," Drebentsov said.

According to the economist, given that recently oil prices have increased, this will affect demand and its growth rates will gradually decrease.

As is known, the price situation in the oil market in the last two years has been defined by the decision of OPEC and some countries that aren’t formally a part of the organization, but agreed to cut production together with OPEC.

“It was the decision made in November 2016, when a number of countries agreed to reduce production in order to stabilize the situation in the oil market,” he said. “Gradually, the goal of reducing production by the agreed 1.8 million barrels per day was achieved. Moreover, by the spring of 2018, production cuts were much more significant. This happened because - in addition to production cuts within the quotas agreed by the Vienna Group - of an uncontrolled decline in the oil production in Venezuela.”

Oil production in Venezuela, as the expert said, decreased by 700,000 barrels per day, not because this country was a member of the group, but because the socio-economic situation in the country developed in such a way that oil production fell at a rapid pace.

“In general, the net reduction in global oil production was largely due to Venezuela,” he added. “That is, on the one hand, the market was affected by the fact that oil production by the countries of the Vienna Group was declining. On the other hand, oil production from hard-to-recover deposits, for example, from shale deposits in the US, continued and continues to grow. By July of this year, this increase amounted to almost 3 million barrels per day.”

In the medium term, it is worth expecting that geopolitical factors will have a significant impact on oil prices, Drebentsov said.

“This is related to what will happen in Venezuela,” he noted. “For now, no one knows what the situation with the oil production will be in that country in the future. It can shrink and it can stabilize."

"The second geopolitical factor is that the US has resumed sanctions against Iran. Sanctions cause Iran’s oil to leave the market. The question is how much oil will leave the market? On average, it is estimated that the global oil market will lose about one million barrels due to reduction in exports from Iran. Everything will depend on how the consumers of Iranian oil in Europe, and especially in Asia, behave .”

He added that so far, the reserves in Saudi Arabia are enough to cover these volumes of Iranian oil.

He also added that if in the worst case there is a maximum drop in oil production in Venezuela and the maximum volume of Iranian oil leaves the market, almost all the available reserves in the world will be spent to compensate for these missing volumes.

“The oil market isn’t accustomed to exist without reserves, due to the fact that something always happens in the world,” said Drebentsov. “For example, oil pipelines periodically explode in Nigeria, social conflicts continue in Libya. That is, reserves serve as a kind of safety cushion for possible cataclysms in the exporter countries. It turns out that now these reserves can be reduced to an absolute minimum.”

---

Follow the author on Twitter: @h_veliyev

Turkmenistan participates in discussions on updating Energy Charter Treaty
Turkmenistan participates in discussions on updating Energy Charter Treaty
EIB to introduce fast-track financing in Central Asia amid COVID-19 pandemic
EIB to introduce fast-track financing in Central Asia amid COVID-19 pandemic
Turkmenistan, Turkey considering ways to effectively use transport corridors
Turkmenistan, Turkey considering ways to effectively use transport corridors
Loading Bars
Latest
Azerbaijan’s AFB Bank terminates cooperation with Fitch Ratings
Trade turnover between Turkey, Georgia down
Iran's Energy Ministry to assign some of its duties to municipalities
Reconstructed highway to shorten driving time from Georgian capital to Oni city
Greek economy to shrink by 7.5-10.5% this year
Uzbekistan, US to deepen strategic partnership
Georgia's gov't to subsidize grape harvest
Iran discloses monthly tax revenues
Airbus first-half deliveries hit 16-year low despite June bounce
Vietnam 2020 economic growth seen at 3%-4%
Bulgaria closes night clubs, bans spectators at sports events
Africa urged to test more as coronavirus cases exceed 500,000
Azerbaijan discloses volumes of gas exported from Shah-Deniz field
India is playing leading role in global revival: PM Shri Narendra Modi
Export of steel from Turkey abroad in 1H2020 shrinks
Rouhani: Iran's exporters help to keep country's economy afloat, competitive
Iran seeks to develop equal partnership with China
Turkey's six-month jewelry export marginally dips
Uzbek Agency for Sanitary-Epidemiological Welfare to buy protective gloves via tender
Oil slips as coronavirus fears offset gasoline recovery signs
Iran's trade possibilities growing through Sistan and Baluchestan Province
Purchases, sales of real estate shrink across Kazakhstan
Cement export from Turkey to int'l markets in 1H2020 slightly down
Georgia expecting abundant harvest of peaches, nectarines
Kazakhstan’s Air Astana reducing flights implementation to South Korea
Azerbaijan increases gas production from ACG, Shah Deniz fields
Turkmenistan participates in discussions on updating Energy Charter Treaty
Georgia launching new state program to promote domestic tourism
Agricultural cluster of Uzbekistan to use innovative sprinklers
Kazakhstan's Nur-Sultan eyeing use of RES at its future industrial park
Iran's Pasargad Steel Complex puts two plants into operation
Role of textile industry in the integration of the Turkic Council countries
S&P Global Platts: Global oil supply to contract in 2020
Kazakhstan aiming to reduce CO2 emissions in country’s civil aviation
COVID-19 infected in Iran surpass 250,000
Azerbaijani oil prices down
Int'l experts assess Georgia’s steps to support pandemic-affected citizens, businesses
Iran reveals number of licenses issued for establishment of enterprises in Yazd Province
Azerbaijani Energy Ministry discloses gas supply volume to Turkey via TANAP in 1H2020
EIB to introduce fast-track financing in Central Asia amid COVID-19 pandemic
Azerbaijani Aveta company talks flour production forecast
Iran launches production facilities in three provinces
Bosch Group to study investment environment of Georgia
Gold price edges up in Azerbaijan on July 9
South Korea's Eximbank expands financial cooperation with Uzbekistan
Uzbek-Korean JV opens tender for procurement of cartridge filters
Kazakh coal extracting venture to buy spare parts via tender
Iran's Ilam Gas Treating Company boosts production
Azerbaijani Energy Ministry announces oil production volumes for June 2020
Factory put into operation in Iran's Sistan and Baluchestan Province
EBRD increases its investments in economy of Uzbekistan
Top up your balance and get double cashback to “Umico” from Azercell!
Foreign specialists on COVID-19 arrive in Azerbaijan (PHOTO)
Kazakhstan's foreign exchange reserves up as gold prices increase
Spokesperson: MFA always stands for substantial negotiations on Karabakh conflict
Russia reports more than 6,500 new coronavirus cases
Turkmenistan, Turkey considering ways to effectively use transport corridors
Azerbaijan's Energy Ministry records decline in oil production for 1H2020
Boeing talks plane deliveries to Turkmenistan, future plans
Uzbekistan studies European construction sector standards
German exports rebound less than expected in May
President Aliyev inaugurates renovated “8th km” substation owned by AzerEnergy in Baku (PHOTO)
Kazakhstan's export to Sweden plummets
USAID supports development in agricultural sector of Uzbekistan
Azerbaijani currency rates for July 9
Iran launches project to pump water from Araz River to Tabriz
“Azerbaijan Airlines” launches special flights to Berlin
Azerbaijan's Atena LLC talks dairy production plans
Iran to increase land assigned for cheap houses construction
Uzbekneftegaz signs deal on engineering services with South Korean company
Tokyo coronavirus cases hit record daily high of 224
Georgia reports new cases of COVID-19
Uzbekistan, South Korea to expand co-op in tourism sphere
Azerbaijan sees growth in state budget revenues from customs
Uzbekneftegaz receives gas inflow from Shurtan field in Uzbekistan
German Albanian Logistics Agency completes contract with TAP
Kazakh uranium extracting company to buy generators via tender
Uzbekistan's COVID-19 cases top 11,000
Armenia violates ceasefire with Azerbaijan 65 times
Turkmenistan-Italy trade turnover details made public
Iran to launch several industrial enterprises in Sistan and Baluchestan Province
Iranian currency rates for July 9
Azerbaijani startups win success in Silicone Valley
Ford's quarterly China sales rise for the first time in 3 years
Australian PM suspends extradition treaty, extends visas for Hong Kong citizens
Chinese mainland reports 9 new confirmed COVID-19 cases, all imported
Turkey's trade turnover with Uzbekistan plummets
Iran reveals value of exports via Hamadan Province
Kazakhstan confirms 1,962 more COVID-19 cases, total now at 53,021
Iran seeks to promote gastronomy tourism
Georgian FM: Bringing of Georgian citizens by special flights to continue in August-September
Congress pushes Pentagon to finally kick Turkey out of F-35 program
Global coronavirus cases rise to more than 12 million
Trump, Mexico's president briefly discussed immigration: White House
Almost 169,000 new coronavirus cases reported globally in past 24 hours — WHO
Finland eases travel restrictions
Chile's COVID-19 cases top 303,000, death toll hits 6,573
Israel reports 1,335 new COVID-19 cases, 33,557 in total
Pence says coronavirus positive cases flattening in Arizona, Texas, Florida
One dead and four injured in London crane collapse
All news