OPEC lowers its forecast for global oil demand in the coming years, impacted by slowing economic growth and continued production increases by its rivals. According to the monthly report published on September 10, global demand is expected to grow by 2 million barrels per day (b/d) in 2024, 80,000 b/d less than forecast in August. For 2025, demand is adjusted to 1.7 million b/d, a reduction of 40,000 b/d from previous estimates.
Impact on OPEC+ required volume
The “call on OPEC+ crude,” the volume the alliance must produce to balance the market, is also revised downward. It rises to 42.8 million b/d for 2024, with a reduction of 100,000 b/d, and to 43.4 million b/d for 2025, decreasing by 200,000 b/d. These revisions come against a backdrop of falling oil prices, with Brent reaching $72.13 per barrel, its lowest level in 17 months.
The alliance decided to postpone the production increase of 180,000 b/d, initially planned for October, to December. In August, OPEC+ production fell to 40.66 million b/d, a decrease of 304,000 b/d from July. This decline was mainly due to disruptions in Libya and maintenance work in Kazakhstan.
Non-OPEC+ Production Outlook
Despite adjustments to demand forecasts, OPEC maintains its stance on non-OPEC+ supply growth. The organization anticipates an increase of 1.2 million b/d in 2024 to reach 53.1 million b/d, and 1.1 million b/d in 2025 to reach 54.2 million b/d. U.S. production is expected to contribute significantly to this growth, increasing by 510,000 b/d in 2024 and 500,000 b/d in 2025.
Tensions over quota compliance
Production quotas remain a major point of tension within OPEC+. Iraq, for example, produced 4.228 million b/d in August, exceeding its quota by 4 million b/d. Despite commitments to reduce this overproduction, the situation remains under surveillance. Kazakhstan, meanwhile, adjusted its production to 1.450 million b/d, in line with its quota, after maintenance work.
Russia, also under pressure to cut production, produced 9.059 million b/d in August, above its quota of 8.978 million b/d. The Joint Ministerial Monitoring Committee (JMMC) will meet again on October 2 to assess the market situation and monitor compliance with its members’ quotas.
Strategic adaptations in a volatile market
OPEC+ faces a constantly changing market, marked by excess supply and fluctuating prices. Quota management and coordination among members will be crucial in the coming months to stabilize the market and respond to external pressures. Production adjustments, ongoing negotiations, and global demand forecasts are key elements for the alliance’s future strategy.
This article is originally published on energynews.pro
