The US Energy Information Administration (EIA) forecasts that liquid fuels production in Brazil, Canada, and China will increase this year and next, contributing to growth in overall non-OPEC petroleum production. According to EIA’s June 2022 Short-Term Energy Outlook (STEO), petroleum production in the combined non-OPEC countries, excluding the Unites States and Russia, will increase by 3% (0.9 million barrels per day [b/d]) in 2022 and by 2% (0.8 million b/d) in 2023, compared with an increase of less than 1% (0.2 million b/d) in 2021.
Data source: US Energy Information Administration, Short-Term Energy Outlook (STEO), June 2022
The United States will account for about 60% of the growth in combined liquid fuels production in all non-OPEC countries. After the United States, EIA expects liquid fuels production to increase the most in the non-OPEC countries of Brazil and Canada. By the end of 2023, Brazil’s liquid fuels production will increase by 400,000 b/d, and Canada’s will increase by nearly 400,000 b/d to 5.9 million b/d, according to the forecast.
For Brazil, the forecast assumes that production from six new floating production storage and offloading (FPSO) units will ramp up through 2023 and continue to drive growth, notably at the Sepia, Mero, and Buzios fields. Once they reach full capacity, these FPSOs will each produce between 70,000 b/d and 180,000 b/d of liquid fuels.
EIA expects Brazil’s production to increase from 3.7 million b/d in 2021 to 3.9 million b/d in 2022 and to 4.1 million b/d in 2023.
Canada’s growth in crude oil and natural gas production during 2022 and 2023 is driven primarily by expanding oil sands and debottlenecking projects. Canada’s growth is due in part to the Enbridge Line 3 crude oil pipeline expansion (760,000 b/d capacity), which became operational in October 2021. The TransMountain pipeline expansion project (890,000 b/d capacity) is slated to enter service at the end of 2022. Additional Enbridge expansions and optimizations to its existing pipeline system, if completed, will add more than 400,000 b/d of export capacity through 2023.
Due to this new pipeline capacity from Enbridge and other planned pipeline expansions, current constraints on oil exports from Canada are expected to lessen by the end of 2023 and drive increased production.
EIA forecasts that liquid fuels production in China, which increased by 130,000 b/d in 2021, will grow by an additional 170,000 b/d in 2022 and 80,000 b/d in 2023 in response to government calls for increased exploration and production. The remaining key sources of forecast non-OPEC production growth come from Norway, Argentina, Kazakhstan, Oman, and Guyana.
US refinery utilization averages 94% in 3Q22 in the forecast, as a result of high wholesale product margins. Despite the expectation that refinery utilization will be at or near the highest levels in the past five years, operable refinery capacity is about 900,000 b/d less than at the end of 2019. As a result, EIA does not expect total refinery output of products to reach its highest level in the past five years.
Global macroeconomic assumptions in STEO are from Oxford Economics and include global GDP growth of 3.1% in 2022 and 3.4% in 2023, compared with growth of 6.0% in 2021.