BAKU, Azerbaijan, April 14. Despite the magnitude of the Russian oil supply disruption, weaker demand growth and steady output increases from Middle East OPEC+ members along with the US and other countries outside the OPEC+ alliance (non-OPEC+) should prevent a severe deficit from developing, Trend reports with reference to the International Energy Agency (IEA).
“During March, global oil supply rose by 450 kb/d to 99.1 mb/d, led by non-OPEC+ producers who more than offset small decreases from OPEC+ members Russia, Kazakhstan and Libya. The producer group’s long-running struggle with capacity constraints and technical issues pushed the supply gap compared to official output targets during March to 1.5 mb/d – the widest since record cuts of nearly 10 mb/d were enforced in May 2020 to counter Covid-induced demand destruction,” reads the IEA report.
The agency analysts believe that excluding Russia, output from the rest of the world is set to rise by 3.9 mb/d from March through December. OPEC+ is expected gradually to increase output by 1.9 mb/d, assuming it fully unwinds OPEC+ cuts in line with existing policy. Middle East members of the group account for most of the increase. Saudi Arabia is projected to add 780 kb/d while Iraq, Kuwait and the UAE between them could add a similar amount. Non-OPEC+ producers are expected to pump 2 mb/d more.
“The US is set to lead the gains, rising by 1.27 mb/d, while Canada, Brazil and Guyana also post substantial increases. For the year as a whole, production is forecast to rise 5.5 mb/d (excluding Russia) – with OPEC+ accounting for 3.5 mb/d and non-OPEC+ 2 mb/d. The US accounts for 62 percent of the non-OPEC+ expansion,” the report reads.
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