Will OECD or OPEC Produce More Petroleum in 2023?

Who will produce more petroleum and other liquids this year? Organization for Economic Cooperation and Development (OECD) countries or OPEC?

It’s a close call, but OECD countries just edge it, according to the U.S. Energy Information Administration’s (EIA) latest short term energy outlook (STEO), which was released earlier this month. The EIA’s May STEO sees OECD petroleum and other liquids production coming in at 33.82 million barrels per day in 2023, compared to OPEC’s 33.76 million barrels per day.

Broken down quarterly, the latest STEO projects that OECD output will average 33.71 million barrels per day in the second quarter, 33.84 million barrels per day in the third quarter, and 34.38 million barrels per day in the fourth quarter. OPEC production, on the other hand, is anticipated to hit 33.75 million barrels per day in the second quarter, 33.77 million barrels per day in the third quarter, and 33.58 million barrels per day in the fourth quarter.

The U.S. is projected to take the largest slice of OECD production in 2023, at 21.12 million barrels per day. Output from the country will average 21.15 million barrels per day in the second quarter, 21.11 million barrels per day in the third quarter, and 21.27 million barrels per day in the fourth quarter, according to the STEO. 

Last year, OPEC supply came in at 34.17 million barrels per day, while OECD output averaged 32.26 million barrels per day, the EIA’s latest STEO highlighted. Total world supply is expected to come in at 101.34 million barrels per day in 2023, compared to 99.85 million barrels per day in 2022, the May STEO revealed.

“Global liquid fuels production in our forecast increases by 1.5 million barrels per day in 2023 compared with 2022 primarily because of growth from non-OPEC producers,” the EIA noted in its latest STEO.

“Excluding production from Russia, which we forecast to fall by 0.3 million barrels per day in 2023, we expect that non-OPEC liquid fuels production will increase by 2.2 million barrels per day in 2023 … We forecast Russia’s crude oil and other liquid fuels production will decline from 10.9 million barrels per day in 2022 to 10.6 million barrels per day in 2023,” the EIA added.

“We forecast that total OPEC crude oil output will fall by 0.3 million barrels per day in 2023, in large part due to the April 3 OPEC+ announcement to cut production,” it continued.

“In addition to the expected adherence to the voluntary production cuts, recent disruptions to crude oil exports in Iraq and a force majeure limiting crude oil exports in Nigeria have also reduced our near-term OPEC forecast in 2023,” the EIA went on to state.

In its previous STEO, which was published in April, the EIA projected that OECD production would be 33.89 million barrels per day and OPEC production would be 33.69 million barrels per day in 2023. That STEO saw total output averaging 101.30 million barrels per day this year.

OECD countries comprise Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Latvia, Lithuania, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.

OPEC countries are made up of Algeria, Angola, Congo (Brazzaville), Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates, and Venezuela.

At its previous OPEC and non-OPEC Ministerial Meeting, which was held on December 4, 2022, OPEC+ decided to hold the next OPEC and non-OPEC Ministerial Meeting on June 4, according to a statement posted on OPEC’s site in December last year.

A statement posted on OPEC’s site back in April noted that the next meeting of the Joint Ministerial Monitoring Committee is scheduled for June 4.

In a statement sent to Rigzone earlier this month, Bjarne Schieldrop, a Chief Commodity Analyst at Skandinaviska Enskilda Banken AB (SEB), said OPEC+ has lots of dry powder for further cuts if needed, adding that the group has “made it clear” that $70 per barrel is the oil price floor.

At the time of writing, the price of Brent crude is currently trading at $72.95 per barrel.

To contact the author, email andreas.exarheas@rigzone.com