IEA Upgrades Global Oil Production Forecast to a Record 101.8 mb/d for 2023
The International Energy Agency (IEA) has revised its projections for global oil output, predicting a record high of 101.8 million barrels per day (mb/d) for 2023. This adjustment comes amidst a complex backdrop of fluctuating demand, geopolitical tensions, and strategic production adjustments by major oil-producing nations and alliances.
Forecast Upgrade Reflecting Non-OPEC+ Production Rises
In a recent report released on November 14, 2023, the IEA adjusted its previous October forecast which anticipated a lesser increase of 1.5 mb/d, reaching 101.6 mb/d. The latest predictions indicate a more significant jump of 1.7 mb/d to the unprecedented figure of 101.8 mb/d for the current year and an expected surge to 103.4 mb/d next year, largely attributed to non-OPEC+ countries’ contributions.
Impact of Geopolitical Tensions on Global Oil Production
The agency’s report suggests that recent geopolitical events such as the tensions between Israel and the Palestinian movement Hamas have not significantly disrupted global oil supply chains or production levels.
OPEC+ October Production Increment
In an adherence to their previous agreement to cap oil production, the OPEC+ countries reported an increase of 70,000 b/d in October’s extraction activities. This slight uptick brought production to a mere 0.4 million below their set quotas. The collective OPEC+ production, which factors in exempt countries from the accord, showcased a growth by 30,000 b/d, reaching 43.19 million in output. Notably, the increments from Angola, Iraq, and Russia played a balancing act against declines in other member nations.
Balancing Quotas and Real Production
According to IEA data, the 19 member countries of OPEC+ produced 36.44 mb/d in September, with a slight increase to 36.51 mb/d in October. While OPEC’s own production remained stable at 28.21 mb/d, non-OPEC member contributions experienced a 30,000 b/d increase to 14.98 million. Their data reflected a continuous effort to balance market needs with production quotas.
Historic OPEC+ Production Adjustments
Back in May 2020, in response to the pandemic-induced market crash and oversupply of oil, OPEC along with 10 independent producers rolled out a substantial cutback of 9.7 million barrels per day. Through several revisions to the terms, the agreement evolved with August 2022 marking the final phase of cut elimination.
As the market dynamics continued to fluctuate, October 2022 saw a new agreement by OPEC+ for a cut in production by two million barrels per day commencing in November. Further solidifying their strategic approach to market stabilization, a meeting on June 4, 2023, resulted in an extension of the alliance’s agreement until 2024, accompanied by a slash in the global oil production target by 1.4 million b/day starting the following year.
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The continual adjustments in oil production forecasts and quotas illustrate the volatile nature of the global oil markets and the sustained efforts of major petroleum-producing countries to maintain stability amidst political and economic uncertainties.