The United States Energy Information Administration (EIA) has increased its global oil demand growth forecast for 2023 by 50,000 barrels per day (BPD) to 1.05 million BPD, resulting in total demand of 100.48 million BPD.
In addition, the total oil demand outlook for 2024 was estimated at 102.2 million BPD, primarily driven by consumption in India and China, marking an increase of 1.73 million BPD year-on-year.
“We forecast that world production of petroleum and other liquid fuels will increase by 1.1 million barrels per day (b/d) in 2023 and 1.7 million b/d in 2024. This increase reflects large growth in several non-OPEC countries and OPEC output that more than offset 1.5 million b/d of declines in Russia’s production over the forecast period.
“We forecast that the United States and other non-OPEC producers outside of Russia will add 2.4 million b/d of oil production in 2023 and an additional 1.1 million b/d in 2024”, it added.
The largest source of non-OPEC production growth over the forecast period is the United States, which contributes 40% of growth in 2023 and 60% of growth in 2024.
U.S. growth is driven by increases in crude oil production in the Lower 48 states—mostly in the Permian region—as well as a combination of increases in the production of hydrocarbon gas liquids and biofuels, which together account for about 40% of U.S. liquid fuels production growth in 2023 and 2024.
EIA also expects that sources of growth in non-OPEC liquid fuels supply will offset declines in Russia‘s oil production.
“We forecast that Russia’s petroleum and other liquid fuels production will decline to 9.5 million b/d in 2023, from 10.9 million b/d in 2022, and then average 9.4 million b/d in 2024. The extent to which European Union sanctions, other sanctions, and the G7 price cap will affect Russia’s crude oil and petroleum product exports and production remains uncertain.
“We expect that most crude oil exports from Russia will continue to find buyers. But we expect the sanctions on petroleum products will cause greater disruptions to Russia’s oil production and exports because finding alternative buyers as well as transportation and other services to reach those buyers is likely to be more challenging than for crude oil”, it added.
OPEC crude oil production in our forecast averages 29.5 million b/d in 2024, up 0.8 million b/d from 2022. Part of this growth is driven by Venezuela.
Following the U.S. Department of the Treasury issuing General License (GL) 41 at the end of November, Chevron is resuming oil production in Venezuela for export to the United States.
EIA’s OPEC production forecast is subject to considerable uncertainty, driven by a combination of possible outcomes for country compliance to existing OPEC+ production targets and changes to existing OPEC+ targets, as well as ongoing developments in Iran, Libya, and Venezuela.
Outside of the United States, other major sources of growth in non-OPEC liquid fuels production come from Canada, Brazil, Guyana, and Norway.
EIA expects that increases in Canada’s production will be driven by projects to improve distribution bottlenecks, including the start-up of the TransMountain pipeline expansion project. Brazil’s increases are driven by new floating production, storage, and offloading (FPSO) deepwater rigs.
