Crude Oil

Crude Oil Global Market Outlook 

• The global crude oil supply is expected to be 101.9 Mbpd in 2023*

• The global crude oil demand in 2022 was 99.6 Mbpd and is expected to reach more than 102 Mbpd in 2024*

• Demand is expected to increase at an annual rate of 2-3 percent in the coming 1-2 years

Crude oil market size

• Global Production: 99.6Mbpd (2022)

• Global Demand: 101.9 Mbpd (2023)*

• Global Demand CAGR: Approx. 2-3 percent (2023–2024)*

Crude Oil Proved Reserves Globally 

• The total proven crude oil reserves globally in 2021 is estimated to be 1.74 billion barrels, which is slightly higher compared to 2020 reserve estimates

• The OECD countries contributes about 15 percent of the total proven reserves globally, whereas non-OECD countries contributed about 85 percent

Distribution of Proved Crude Oil Reserves from 1995 to 2019 

• The global proved oil reserves is estimated to remain stable at about 1.74 billion barrels in 2022 when compared to 1.735 billion barrels in 2020

• Reserves have remained nearly stable during the period 2018-20, and it is likely to improve marginally for 2021 as exploration activities have gradually picked up pace

• OPEC countries continue to hold the largest share (85.3 percent) of global proved reserves

• On a regional basis, South and Central American reserves have the highest R/P ratio of 151 years

Per Capita Consumption of Oil in 2022

• The highest per capita consumption in 2022* (estimated) for crude oil was from NAM and the Middle East with over 2.5 tons/capita

• Australia, Japan, and the Netherlands stood in the next level of per capita consumption, from 1.5 tons to 2.5 tons

• Chile and Colombia stood at a higher rate of consumption per capital levels, at 1–1.5 tons in LATAM

• In 2022, the per capita consumption would be 1–3 percent higher, owing to the demand spike after the ease in pandemic restrictions

Global Crude Oil Supply and Demand Analysis

Oil Market Analytics

• Supply–Demand: US crude oil production continues to remain around 12 to 12.1 mbpd, reflecting challenges in increasing production levels. US crude oil inventory levels remained stable at lower levels around 420 million barrels. Overall inventory levels in the SPR facility continue to decline in Dec-22. U.S. oil recounts were reported around 620 levels in recent weeks.

• OPEC Supply: OPEC is not likely to increase production in the long term to contain oil prices, and hence, result in a recovery in oil prices in recent weeks. Expectations of Chinese refinery demand improving to serve European consumption, especially in the upcoming winter season, further supported the oil prices.

US Oil Production sustain all-time high levels:

• US Production: The levels remain close to 12 mbpd, as rig counts have increased to 580 plus levels

• US Inventories: US inventory continues to trend below 420 million barrels, as export demand remains consistently close to 4 mbpd

• US Exports: The exports have witnessed volatility on global uncertain demand conditions. Overall, exports continue to trend within 3–4 mbpd, as OPEC production cuts persisted in H1 2021

• Increasing Rig Counts: The US rig counts have increased steadily to support higher production levels, as external demand remains strong

• US Dollar has witnessed appreciation, on the account of global geopolitical crisis, even as crude oil prices remain high

Sustainability Best Practices: Case Studies

Offshore Wind Energy-Norway

• Supplier has decided to invest on an offshore wind energy project of 88MW capacity

• This project, with 11 wind turbines are expected to provide renewable energy to the five platforms in the region

• The project is worth $550 million, and would come online by 2022

Emission Management

• The supplier has been utilizing the support of cameras to identify leakages and emissions and curtail the same

• Drone mounted cameras are used in U.S. and Oman operations to measure methane emissions from operations

• The cloud imaging camera quantifies the leak and sends an automated alert to the control room

Waste Management-Australia

• Supplier has partnered with a local waste management firm, for waste disposal at its floating liquefied natural gas (FLNG) facility

• The recycling around 613 tones of waste from FLNG facility, which is 70 percent of the project’s total waste

Crude Oil Price Forecast: Outlook

• WTI crude oil prices are expected to average around 80.5 $/bbl. in Feb-23, with the overall trend remaining stable. Decline in US crude oil production growth rate, coupled with decrease in exports trend, is expected to reflect negatively on oil prices. Higher US interest rates are expected to further reflect negatively on the crude oil demand growth rate in the short term

• Positive trend in the US stock markets and relatively weak US Dollar trend are expected to support demand growth rate and hence, it can help stabilize oil prices in the short term

• Crude oil prices are expected to average around 85.5 $/bbl. in Feb-23 on expectations of demand recovery in China in the short to medium term. As production levels by OPEC are further decreased, it is expected to provide optimism over increase in oil prices. However, risk of further increase in interest rates in Europe is expected to keep overall demand growth rate levels stable. This environment is expected to result in overall stable trend in the crude oil prices, as both supply and demand growth rates are weakening