Non-OPEC Countries Will Lower Oil Supply in 2020

Oil supply from non-OPEC countries will amount to 62.11 million barrels per day (bpd) in 2020, compared to 65.14 million bpd in 2019 (a decrease of 3.03 million bpd). This was reported by Interfax with reference to the monthly report from the OPEC.

Experts increased the 2019 supply level by 120,000 bpd up to 65.14 million bpd and increased the 2020 estimated supply by 350,000 bpd up to 62.11 million bpd. Thus, it is now projected that non-OPEC countries will reduce oil production in 2020 by 3.03 million bpd, not 3.26 million.
The projection was mainly revised due to the OECD countries of America.

Experts estimate that, in addition to a 1.82 million bpd decrease from non-OPEC countries participating in the OPEC+ agreement, the decline in oil production from other countries amounted to 4.16 million bpd. In total, this translates to a production decrease of 6 million bpd from non-OPEC countries in the second quarter of 2020.

The OPEC points out that due to the COVID-19 pandemic many countries have decreased oil mining, but production is expected to grow in the third quarter. For example, some US shale oil producers are showing signs of a recovery in production which was cut since April.

The projection for production growth in the US, despite a sharp drop in May by 2 million bpd down to April lows, has been slightly revised upwards – by 46,000 bpd due to higher than expected production in the second half of 2020. Now it’s showing a decrease of 1.32 million bpd in 2020, to 17.09 million bpd.

Liquid hydrocarbon production in Canada also grew in June after an increase in production of bituminous oil in Alberta. In 2020, according to the OPEC’s estimates, a decrease in oil supply is expected mainly in the US (-1.32 million bpd), Russia (-1.13 million bpd), Canada, Kazakhstan, Malaysia, Colombia and Azerbaijan, whereas oil production will grow in Norway, Brazil, Guyana and Australia.

Production of liquid hydrocarbons in non-OPEC countries for 2021 was also revised upwards by 66,000 bpd and is now expected to grow by 0.98 million bpd to 63.1 million bpd.

The United States (+0.24 million bpd), Canada, Brazil and Norway are expected to be the main drivers of supply growth, with most of the increase coming from a recovery from 2020 rather than new projects. Nonetheless, uncertainty around financial and logistic aspects of the US production as well as the possibility of the second wave of the COVID-19 pandemic worldwide remains high.