OPEC expects to increase oil output in 2023 by nearly 1 million barrels per day due to rising global demand.
“In 2023, expectations for healthy global economic growth amidst improvements in geopolitical developments, combined with expected improvements in the containment of COVID-19 in China, are expected to boost consumption of oil,” the organization said in its monthly report released on July 12.
Year over year, world oil demand is anticipated to rise by 2.7 million barrels per day (bpd), and overall demand is projected to reach 103 million bpd, OPEC said in its report.
Non-OPEC supply is expected to increase by 1.76 million bpd in 2023, with OPEC having to chip in an additional 940,000 barrels daily. In total, OPEC production is expected to be at 30.1 million barrels per day in 2023, up from 29.2 million barrels in 2022.
For 2022, total global oil demand is estimated to increase by 3.36 million bpd, with OPEC having to release an extra 1.1 million barrels of oil each day.
In the first quarter of 2022, OPEC was supposed to release 28.63 million bpd but could only produce 28.36 million bpd, a shortfall of 270,000 barrels. Things improved in the second quarter after OPEC produced 610,000 bpd more than expected.
In June, OPEC oil output rose by 234,000 bpd, driven by production increases in Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Iran, and Angola.
With regard to the United States, OPEC expects total oil output to rise by 700,000 bpd in 2023, a slower growth when compared to the 880,000 bdp increase estimated for 2022.
Increasing Oil Output
President Joe Biden is scheduled to meet with Persian Gulf leaders in Saudi Arabia this week to discuss raising oil output to ease gasoline prices. White House national security adviser Jake Sullivan stated on July 11 that OPEC members have the capacity to boost oil production.
However, some experts do not agree with such a view.
“I think that a surge in Saudi production seems unlikely. I expect some anodyne statements from Saudi Arabia about helping to balance the global oil market, meet global demand, support economic growth and stability among the import countries,” Ben Cahill, a senior fellow at the Center for Strategic and International Studies, told Reuters.
On the sidelines of the G–7 summit in June, French President Emmanuel Macron was heard telling Biden about a call he had with UAE leader Sheikh Mohammed bin Zayed al-Nahyan regarding the difficulty in raising output, according to Reuters.
The UAE leader told Macron that his country was at “maximum” oil production capacity and that the Saudis are also struggling.
Reuters contributed to this report.