BAKU, Azerbaijan, April 5. A severe curtailment of Russian supplies above 3 mb/d would see a significant near-term pressure persisting well into Q3 2022, with a collective supply response filling the gap only by year end, Trend reports with reference to the analysis by Bassam Fattouh and Andreas Economou, Oxford Institute for Energy Studies (OIES).
OIES full curtailment case sees the more severe 3.9 mb/d disruption in Russian oil by May 2022.
“Non-OPEC response outside OPEC+ gains momentum in 2022 with the US leading the pack and accounting for nearly half the 0.6 mb/d gains, but further gains in 2023 remain modest at 0.4 mb/d. We assume OPEC+ stick to their current agreement with producers gradually increasing supplies on a monthly basis by 0.4 – 0.432 mb/d till September 2022. But with most OPEC+ producers already producing near maximum capacity, we expect total OPEC+ to be able to return only 1.5 mb/d between March and September 2022, versus the pledged 2.9 mb/d,” note the authors.
As for oil prices, OIES analysts note that Brent averages $131.3/b in 2022 and $112/b in 2023, reaching a monthly high of $156.7/b in May 2022 and falling below $100/b only by Q4 2023.
“The global oil demand impact intensifies with growth losses totaling 2.5 mb/d by 2023, with y/y global demand growth averaging 2.2 mb/d in 2022 and 0.5 mb/d in 2023. The impact on fuel demand for industry reaches 60 percent or 1 mb/d out of the total 2.5 mb/d loss, followed by road fuels at 25 percent or 0.6 mb/d, while jet fuel share falls to 12 percent as the impact rises only by 0.1 mb/d. Market deficits persist in 2022 on the back of consecutive large deficits in the previous quarters and average -1.1 mb/d for the year, before the market balances in 2023 to 0.05 mb/d.”
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