BAKU, Azerbaijan, March 19
Leman Zeynalova - Trend:
The extra oil coming into the global market from April will be as much as 3 million barrels per day (bpd), Trend reports citing Rystad Energy, an independent energy research and business intelligence company.
“Two million bpd is what OPEC+ countries are realistically able to add next month based on their storage, spare capacity and ramp up capabilities. Another million bpd could come if a cease-fire is agreed upon in Libya and the country reaches pre-shut-in levels,” said the company.
Before the OPEC+ meeting earlier this month, Rystad Energy had calculated that cuts of about 2 million bpd were needed to balance the market.
“The oil price is soon expected to slide even lower once the extra supply becomes available from April. But that’s not the end of it, as OPEC+ could add another 800,000 barrels of oil from May, ramping up production from its spare capacity even further,” the company said in its report.
Separately, Libya itself could make use of more of its total production capacity in a cease-fire scenario, which is as high as 2.8 million bpd, according to Rystad Energy.
“The country’s current output is less than 100,000 barrels per day due to the ongoing conflict.”
Breaking down the additional oil production capability of the OPEC+ countries, Saudi Arabia will be the producer that plans to add the most, reaching total supply capabilities of 12.3 million bpd, the report says.
“We believe their upstream crude production capacity, without any additional drilling, is limited to around 11.5 million bpd in the short term. For now, we expect the country’s April crude production to rise to between 10.8 million and 11 million bpd from 9.8 million bpd in February, and further to 11.2 million bpd in May. The remaining oil could come from its global storage facilities, in order to meet the 12.3 million bpd target,” said the company.
Rystad Energy expects that Russia can increase production by at least 300,000 bpd in the next 90 days, according to guidance provided by Energy Minister Alexander Novak, but for now the company includes a more conservative increase of about 200,000 bpd in its estimates.
“We expect UAE production to increase by about 200,000 bpd to 3.20 million bpd in April from February’s 3.04 million bpd, mostly from its flagship Murban onshore field. We acknowledge that the UAE could manage to increase production even higher if it utilizes its entire spare capacity.”
A 110,000-bpd increase is also expected from Kuwait in April, raising its total production to 2.80 million bpd, with less upside risk than for UAE, Russia and Saudi Arabia, according to the company.
“Based on our analysis, Iraq will ramp-up production by 250,000 bpd to nearly 4.9 million bpd in April. If Iraq finds buyers for this additional crude, its total spare capacity of 480,000 bpd could be back online by June.”
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