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Oxford Institute downgrades global oil supply growth

Oil&Gas Materials 20 May 2022 12:31 (UTC +04:00)
Oxford Institute downgrades global oil supply growth
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, May 20. Global supply growth is downgraded by 0.73 mb/d to 4.3 mb/d in 2022 and 0.39 mb/d to 1.6 mb/d in 2023, Trend reports with reference to Oxford Institute of Energy Studies (OIES).

“Oil supply tailwinds strengthen on the risk of bigger Russian supply disruptions, limited output response outside Russia due to growth constraints and the dimmed prospects of Iran’s return to the market. A severe disruption in Russian supplies accelerated by a potential EU oil ban that could shut in nearly 4 mb/d of Russian output by year-end, would see a supply gap of 1 mb/d remaining uncovered in 2023 adding further pressure to an already tight market,” OIES said in its latest report.

The report reveals that OPEC+ is likely to stick to its agreement till its expiration in September returning on paper 1.6 mb/d excluding Russia. But OPEC+ response is now confined mainly to OPEC Middle East, as capacity constraints cap supply responses from elsewhere.

OPEC+ underproduction excluding Russia in April rose to 1.3 mb/d, of which OPEC Africa producers alone accounted for 60 percent of the total. On this basis, our best-case scenario sees OPEC+ excluding Russia lifting output only by 1.15 mb/d between May and September 2022, 0.45 mb/d below the headline target. Non-OPEC crude supply is downgraded by 0.33 mb/d to 0.9 mb/d in 2022, as growth outside OPEC+ in Q1 undershoot expectations and surging inflation and supply-chain bottlenecks weigh on the US supply outlook. US growth outlook in 2022 is downgraded by 0.1 mb/d but remains robust at 0.9 mb/d, followed by a modest 0.5 mb/d gains elsewhere (mainly in Canada and Brazil). For 2023, non-OPEC supply growth is upgraded by 0.16 mb/d to 0.5 mb/d on small upward revisions in Norway, the US and Canada.

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