Tawasul
Mubasher TV
Contact Us Advertising   العربية

OPEC losing grip on global market; Non-members are the culprit

OPEC losing grip on global market; Non-members are the culprit

By: Muhammad Abdul-Wakeel

Mubasher: Non-OPEC countries have been increasing their oil output over time, compromising the organisation's ability to control the global market.

A report released by Norwegian research and business intelligence company, Rystad Energy, predicts that oil production from non-OPEC countries would surge in 2020.

Non-OPEC output is expected to increase by 2.26 million barrels per day (bpd) next year, challenging OPEC’s and Russia’s ability to balance the market, the report said.

20191203_PR Chart 1 Non OPEC production growth 1960 2020.jpg

“Rystad Energy believes that OPEC will need to extend and deepen production cuts if they have any hope of supporting the oil price in the near-term,” head of upstream research at Rystad Energy, Espen Erlingsen, commented.

In 60 years since OPEC establishment in 1960 toward 2020, production from non-OPEC countries reached its peak in 1978 when it surged 1.96 million bpd due to increase in output from Russia, the US, the UK, and Mexico.

However, that record may be broken in 2020 owing to contributions from tight oil and offshore production, Rystad Energy noted.

“In a unique turn of events, it is the offshore segment which will drive much of 2020’s non-OPEC supply growth. The record-high production growth next year comes almost exclusively from tight oil and offshore,” Erlingsen said.

The US will top non-OPEC oil producers in terms of output growth rate in 2020, followed by Norway and Brazil.

20191203_PR Chart 2 Non OPEC production growth 2020.jpg