According to U.S. Energy Information Administration (EIA) website publication on Short-Term Energy Outlook (STEO) January 2023 report:
Crude oil prices: We forecast that Brent crude oil prices will average $83 per barrel (b) in 2023 and $78/b in 2024. Our inaugural edition of STEO Between the Lines provides an in-depth summary of our Brent crude oil price assumptions and major risks to our forecast. Between the Lines is a new product that will periodically accompany STEO to provide in-depth analysis of issues in our forecast.
Global liquid fuels production: We forecast that world production of petroleum and other liquid fuels will increase by 1.1 million barrels per day (b/d) in 2023 and 1.7 million b/d in 2024. This increase reflects large growth in several non-OPEC countries and in OPEC output that more than offset 1.5 million b/d of declines in Russia’s production over the forecast period.
We forecast that the United States and other non-OPEC producers outside of Russia will add 2.4 million b/d of oil production in 2023 and an additional 1.1 million b/d in 2024. The largest source of non-OPEC production growth over the forecast period is the United States, which contributes 40% of growth in 2023 and 60% of growth in 2024. U.S. growth is driven by increases in crude oil production in the Lower 48 states—mostly in the Permian region—as well as a combination of increases to production of hydrocarbon gas liquids and biofuels, which together account for about 40% of U.S. liquid fuels production growth in 2023 and 2024.
Outside of the United States, other major sources of growth in non-OPEC liquid fuels production come from Canada, Brazil, Guyana, and Norway. We expect that increases in Canada’s production will be driven by projects to improve distribution bottlenecks, including the start-up of the TransMountain pipeline expansion project. Brazil’s increases are driven by new floating production, storage, and offloading (FPSO) deepwater rigs.
A noteworthy new source of world oil supply is Guyana, which first began producing oil in 2019 after the discovery of the new offshore deepwater Liza oil field. Critical investment and new production vessels helped Guyana’s oil production increase to an average of 260,000 b/d in 2022. We expect further rampups in output and the development of new oil resources over the next two years, helping oil production in Guyana increase to an average of 540,000 b/d by 4Q24.
Growth in Norway’s oil output in 2023 stems from the recent start-up of the offshore Johan Sverdrup Phase 2 expansion project, which will result in Norway’s liquid fuels production rising by more than 500,000 b/d over the forecast to reach almost 2.5 million b/d in 2024.
We expect that these sources of growth in non-OPEC liquid fuels supply will offset declines in Russia‘s oil production. We forecast that Russia’s petroleum and other liquid fuels production will decline to 9.5 million b/d in 2023, from 10.9 million b/d in 2022, and then average 9.4 million b/d in 2024. The extent to which European Union sanctions, other sanctions, and the G7 price cap will affect Russia’s crude oil and petroleum product exports and production remains uncertain.
We expect that most crude oil exports from Russia will continue to find buyers. But we expect the sanctions on petroleum products will cause greater disruptions to Russia’s oil production and exports because finding alternative buyers as well as transportation and other services to reach those buyers is likely to be more challenging than for crude oil.
OPEC crude oil production in our forecast averages 29.5 million b/d in 2024, up 0.8 million b/d from 2022. Part of this growth is driven by Venezuela. Following the U.S. Department of the Treasury issuing General License (GL) 41 at the end of November, Chevron is resuming oil production in Venezuela for export to the United States. Our OPEC production forecast is subject to considerable uncertainty, driven by a combination of possible outcomes for country compliance to existing OPEC+ production targets and changes to existing OPEC+ targets, as well as ongoing developments in Iran, Libya, and Venezuela.
Global liquid fuels consumption: Forecast global consumption of liquid fuels reaches 102.2 million b/d in 2024, driven primarily by growth in non-OECD countries, such as India and China. Trends in oil consumption largely reflect trends in economic activity. We forecast growth in global demand for oil will slow in 2023 before picking up in 2024, as global GDP growth (based on forecasts from Oxford Economics) rises from 1.8% in 2023 to 3.3% in 2024. Although we forecast global oil consumption to increase, our demand forecast remains uncertain as a result of ongoing concerns around global economic conditions and the impact of the easing COVID-19 restrictions and rising case counts in China.
