OPEC member-countries have enjoyed very mixed fortunes since the beginning of 2008. While aggregate OPEC output (excluding Indonesia throughout) was still 600,000 bpd below its January 2008 level last month, production by OPEC’s four GCC members (Saudi Arabia, Kuwait, the UAE and Qatar) had increased by 1.4 mbpd, while output by the non-GCC members had fallen by more than 2 mbpd.
Moreover, the four GCC countries saw their share of aggregate OPEC output increase from 49% in Jan-08 to 54% in Aug-13.
In the aftermath of the 2008 financial crisis all OPEC members cut their production, the GCC countries by 2.6 mbpd from their 2008 peak to a low point in March 2009 and the eight other OPEC members by just 1.0 mbpd.
With less than half of total OPEC production in 2008, the GCC members accounted for more than 70% of the output cuts. By the beginning of 2011, production by OPEC’s GCC members was still more than 840,000 bpd below where it had been three years earlier, while output by the others was 200,000 bpd below its start-2008 level.
Since the beginning of 2011 the situation has changed dramatically. The loss of Libyan production during the revolution in 2011 and again in the last couple of months due to strikes and protests, coupled with the loss of around 1mbpd of Iran’s output as a result of sanctions in 2012, has slashed OPEC’s non-GCC output, while production by the four GCC countries, led by Saudi Arabia, has soared.
Global oil demand growth of just under 1 mbpd this year and just over 1 mbpd in 2014 is expected to be more than offset by continuing strong growth in non-OPEC output. As a result, global oil inventories are expected to rise for the third year running in 2014.
If OPEC maintains aggregate production at 30.5 mbpd next year, slightly below its current level, the downward pressure on prices should not be strong enough to push Dated Brent below $100/bbl.
Information from Hellenic Shipping News was used in this report.