Non-OPEC won’t return to pre-COVID levels of oil output

Oil&Gas Materials 28 January 2022 13:22 (UTC +04:00)
Non-OPEC won’t return to pre-COVID levels of oil output

BAKU, Azerbaijan, Jan.28

By Leman Zeynalova – Trend:

Some countries are already over complying with the quotas as they reach their maximum capacity, while most producers and in particular non-OPEC will not be able to return to pre-COVID levels (for example, Angola, Nigeria, Azerbaijan, Kazakhstan and Russia) in 2022, Trend reports with reference to Oxford Institute of Energy Studies (OIES).

OIES notes that despite the increase in production between August and December 2021, the market is projected to remain in deficit in Q3 and Q4 2021 and for the year as a whole.

“Deficit is estimated at -1.2 mb/d in Q3 and -0.5 mb/d in Q4 2021. Depending on global oil demand outcomes and the pace and extend of the recovery of Iranian production, the market could switch into surplus in 2022 if OPEC+ stick to their deal. But balances could find support from either the supply or demand side of the market, or both, narrowing the surpluses and leading to a more balanced market. This shows the importance of OPEC+ balancing role in a uncertain environment,” reads the latest report released by the Institute.

As for the prices, OIES analysts predict that oil prices will remain confined in the $60/b and $80/b price range.

“As OPEC+ release their barrels, the spare capacity in the system becomes thin providing support for oil prices. § Upside risks are building in 2022, but for the year as a whole we now see the balance of risks around our price outlook shifting on the upside,” the report reads.


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