EIA estimates decrease in global surplus crude oil production capacity in 2022
26 June 2022
As of May 2022, surplus crude oil production capacity in non-OPEC countries decreased by 80% compared with 2021, according to the US Energy Information Administration’s (EIA) new report Global Surplus Crude Oil Production Capacity.
In 2021, 1.4 million barrels per day (b/d) of surplus production capacity was available in non-OPEC countries, about 60% of which was in Russia. As of May 2022, EIA estimates that all surplus production capacity in Russia was eliminated due to the sanctions implemented after Russia’s full-scale invasion of Ukraine.
EIA determined that excess oil production capacity declined in other non-OPEC producing countries as well. EIA estimates that, as of May 2022, producers in non-OPEC countries had about 280,000 b/d of surplus production capacity.
EIA defines surplus capacity as the maximum existing capacity that can be brought online within 30 days and sustained for at least 90 days. The assessment of surplus crude oil production capacity does not include volumes of oil that are offline because of unplanned outages and disruptions, including sanctions, because these volumes cannot be brought to market voluntarily. For that reason, crude oil production that is offline in Iran, Libya, Venezuela, and now Russia, is excluded from surplus capacity estimates.
Out of date.
With current WTI prices anticipated to stay well above $90 US for the next 6 - 18 months, fracking, alternative well access, oil sands, etc., are far more viable and have increased 'attractiveness' for replacing lost Covid revenues. M&As, well re-openings, and seasonal investment have accelerated over the last 30 - 60 days.
Posted by: Jer | 26 June 2022 at 05:51 AM