OPEC+ oil producers can run out of spare productive capacities within next year - Vortexa

Arab World Materials 19 November 2021 10:11 (UTC +04:00)

OPEC+ countries significantly increased oil exports in October-November, which contributed to the decline in Brent prices in recent weeks. However, the reserve of productive capacities of the countries involved in the agreement is limited and may turn out to be less than the known estimates, the Vortexa consulting company states in its report, Trend reports with reference to TASS.

According to the company, OPEC + can run out of productive capacities within the next year, of the demand continues to grow.

Since May, the countries of the OPEC + agreement have been weakening restrictions on oil production, but not all of them were able to really increase production and exports, which fueled the rise in oil prices in recent months. Only Saudi Arabia and the United Arab Emirates were able to provide a noticeable increase in oil supplies abroad, whose total exports are currently 2 million bpd higher than the average in the first half of 2021.

"But their supply additions were eaten up by disappointing export levels elsewhere, including at that point of time Russia," Vortexa notes.

Meanwhile other countries of the alliance showed stagnation or even a decline in production, according to the calculations by Vortexa experts.

"According to the EIA, global spare capacity in October was 6.2 mbd, while according to the Saudi oil minister it is 3-4 mbd. I would argue we have at best 3 mbd, up to 2 mbd in Saudi Arabia and less than 1 mbd in Russia and the UAE combined," David Wech, Vortexa author, says.

"If demand were really to reach 2019 levels soon and declines at many producers continue at recent rates, most of that cushion could be used up within the next 12 months," he concludes.