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Insufficient investment in the upstream of the oil industry may lead to tight oil supply before 2030
.
After last year's epidemic caused oil supply-side investment to drop to a trough, this year's investment is only half of the 2014 peak
How much new oil supply does the world need?
According to Wood Mackenzie's prediction, the oil supply gap from 2022 to 2030 may be as high as 20 million barrels per day.
There is a large gap between the production of oil fields that are already in production and development and the oil demand in 2030
Wood Mackenzie predicts that between 2022 and 2030, oil demand will increase by nearly 7 million barrels per day, but the demand growth rate will slow down year by year, and the annual new oil demand will decrease by nearly 500,000 barrels per day from the previous year
.
However, due to the natural decline in the output of mature assets of major oil-producing countries such as the United States, China, and Russia, non-OPEC oil-producing countries will reduce their oil production by 13 million barrels per day
Where does the new oil supply come from
It is estimated that the world will increase oil production by 20 million barrels per day to fill the supply gap in 2030, and the new output will mainly come from non-OPEC oil-producing countries
.
Among them, the production cost of about 16 million barrels/day of new capacity is relatively low, and the break-even point may even be lower than 60 US dollars/barrel; the source of 4 million barrels/day of production capacity is also the same, but the cost is higher, and the break-even point is USD 60~80/barrel
Wood Mackenzie predicts that from 2022 to 2030, the net increase in OPEC oil production will be minimal, and the output of Middle Eastern countries will increase, while the output of Nigeria, Angola, and Algeria will decline
.
Impact on OPEC
Over the past decade, OPEC’s market share has fallen sharply, from nearly 40% in 2010 to 30% in 2020
.
It is mainly because of the rise of shale oil in the United States and the epidemic that has caused OPEC to significantly reduce its production in 2020
As demand resumes, OPEC+'s top priority is to balance the market.
It is expected that from now to the end of 2022, OPEC will gradually increase production
How is the oil price trend?
According to Wood Mackenzie's prediction, the price of Brent crude oil before 2030 will remain at US$80/barrel for three main reasons
.
First, the market fundamentals are strongly supported.
In order to meet the growing oil demand before 2030, the market needs an oil price of US$80/barrel to stimulate high-cost oil investment
Second, OPEC's available reserve capacity is limited, and there is a risk of supply disruption in the market
.
Political risks (Nigeria, Libya) and sanctions risks (Iran, Venezuela) will limit OPEC's reserve capacity to 4 million barrels per day, which is 4% of global oil demand
The third is OPEC's strategy
.
The strong oil prices now help OPEC maximize its revenue and make up for the losses caused by the epidemic last year
.
However, higher oil prices have stimulated marginal investment by non-OPEC oil-producing countries, which may limit OPEC's room for substantial increase in production beyond 2022
.
This situation has already occurred in the United States
.
The recovery process of the U.
S.
shale oil industry this round is much slower than in the past, and the listed oil companies are more cautious in investment
.
Even so, the number of rigs in the 48 states of the United States has doubled from the August 2020 low in the last 10 months, mainly because private companies have no concerns about increasing dividends and are "increasing" capital expenditures, but they can only guarantee this year.
The total output does not decrease
.
Wood Mackenzie predicts that the number of new drilling rigs in the United States will increase by 80% in the next 18 months, mainly in the Permian Basin, and oil production will increase
.
From 2022 to 2030, based on the steady rise of Brent oil prices to US$80/barrel, oil production in the 48 states of the United States will increase by 2 million barrels/day
.
OPEC, especially the oil-producing countries in the Gulf region, holds most of the world's lowest-cost, undeveloped oil and gas resources
.
After 2030, as the output of non-OPEC oil-producing countries stabilizes and declines, the world will increasingly rely on OPEC's untapped oil resources
.
However, if international oil prices remain at the current level or continue to rise, OPEC will face greater challenges in increasing its market share overall in the next ten years
.
Once oil demand recovers after the epidemic and market supply and demand rebalance, OPEC may not be able to balance oil export revenue and market share
.
(Source: Wood Mackenzie official website compiled by Zhang Jiong)
Transfer from: China Petrochemical News
