Global Oil Production Surpasses Consumption in 2023: An Overview
In the latest Short-Term Energy Outlook (STEO) released on October 7, 2023, the U.S. Energy Information Administration (EIA) revealed a significant trend: world petroleum and other liquid fuels production has outpaced consumption throughout the year. This insight sheds light on the dynamic interplay between supply and demand in the global energy markets.
Production vs. Consumption: 2023 in Review
The STEO highlights that in the third quarter of 2023, global production averaged 107.43 million barrels per day (bpd), while consumption lagged at an average of 104.83 million bpd. Comparing this to earlier quarters, the figures remain compelling. In the second quarter, production was slightly lower at 105.06 million bpd against a consumption of 104.05 million bpd. The first quarter saw a production rate of 103.62 million bpd, with consumption only at 102.33 million bpd. This trend marks a distinct shift from the third quarter of 2024, when consumption last exceeded production, with figures at 103.45 million bpd and 103.09 million bpd, respectively.
Historical Context and Recent Trends
Reflecting on past performance, the EIA’s data from previous years further contextualizes the current state. In the first quarter of the preceding year, for instance, production was at 102.60 million bpd against a consumption of 101.79 million bpd. Such historical comparisons underscore the oscillation between supply and demand, offering insights into how external factors, including geopolitical influences and market dynamics, can impact these figures.
Future Projections: What Lies Ahead?
Looking ahead, the STEO forecasts an average production of 107.31 million bpd for the fourth quarter of 2023. In contrast, anticipated consumption for the same period is projected at 104.72 million bpd. The EIA offers an optimistic outlook for 2024, projecting sustained production increases. Specifically, production is expected to average 106.39 million bpd in Q1 2024, with further increases throughout the year, culminating at 107.77 million bpd by Q4.
OPEC+ Influence and Global Production Dynamics
Central to the EIA’s analysis is the role of OPEC+ and various non-OECD countries in driving global liquid fuels production growth. The Outlook anticipates an increase of 2.7 million bpd in 2025, followed by another 1.3 million bpd in 2026, primarily led by nations outside the OPEC+ coalition. This shift is attributed to planned production increases from OPEC+ alongside robust supply growth from non-OECD countries.
Regional Breakdown: The Non-OECD Surge
The consumption growth narrative is dominated by non-OECD countries, particularly in Asia. Forecasts indicate a twofold increase of 1.2 million bpd in 2025 and 1.0 million bpd in 2026, predominantly driven by countries like India and China. The STEO highlights that these two nations alone are expected to contribute over 0.4 million bpd to global consumption by 2026 compared to 2024 levels.
Understanding OPEC vs. Non-OECD Consumption Patterns
Consumption figures provide a clearer understanding of the stark differences between OECD and non-OECD countries. The EIA specifies that OECD countries’ petroleum consumption is categorized as “petroleum product supplied,” a standard definition found in their Petroleum Supply Monthly. Conversely, non-OECD consumption encompasses “apparent consumption,” which considers internal consumption along with refinery fuel and loss, and bunkering activities. This distinction is crucial for comprehending the complex landscape of global energy consumption.
The Nature of Liquid Fuels Production
The EIA further clarifies that their world petroleum and other liquid fuel production data incorporates various sources, including crude oil, lease condensate, natural gas plant liquids, and refinery processing gains. However, discrepancies in historical production data across different nations may lead to inconsistencies in distinguishing between crude oil and other liquid fuels.
Conclusion: An Ongoing Analysis
The current landscape of global oil production and consumption signifies a pivotal moment in the energy sector, characterized by sustained increases in production coupled with varying consumption patterns across different regions. With projections pointing towards continued growth, especially outside the OECD framework, stakeholders and analysts will keenly observe these dynamics as they unfold, influencing everything from national policies to global market strategies.