According to the International Energy Agency’s (IEA) latest report on Wednesday, global oil production increased by approximately 27%, equivalent to 280,000 barrels per day (bpd), reaching a total of nearly 101.50 million bpd in August. This surge was primarily fueled by increased output from Canada, Iran, and China.
OPEC output reached 33.52 million bpd in August, up by 120,000 bpd from July. Iran increased its crude oil output by 100,000 bpd to 3.14 million bpd in August, the biggest rise in the group. The production also rose in Nigeria, Iraq, Libya and Equatorial Guinea.
Output from Saudi Arabia, the group’s largest producer, declined by 100,000 bpd to 8.98 million bpd. However, output in Algeria, Venezuela, Angola and the Congo remained relatively similar to last month.
Non-OPEC oil production totaled 67.97 million bpd in August, up 170,000 bpd from July.
With output cuts from the world’s biggest producers in place, the IEA expects global output to fall through the remainder of the year.
“From September onwards, the loss of OPEC+ production, led by Saudi Arabia, will drive a significant supply shortfall through the fourth quarter,” the IEA said.
The agency confirmed that global oil supply is expected to decline by 330,000 bpd between August and the end of the year.
For this year, global oil output is projected to expand by 1.5 million bpd to a record 101.6 million bpd, “with the US, Iran – despite international sanctions – and Brazil ranking as the world’s top three sources of growth,” the agency said.
Demand growth set to slow in 2024
Total oil demand is forecast to grow by 2.2 million bpd to reach 101.81 million bpd this year, “led by resurgent Chinese consumption, jet fuel and petrochemical feedstocks,” the IEA said.
In 2024, global demand growth is set to slow sharply by around 1 million bpd to 102.8 million bpd.
The drop in demand growth is attributed to “efficiency gains, EV penetration and working from home further suppressing consumption.”
For 2024, the IEA forecasts a reduction in demand in China, the world’s largest oil importer and second-largest oil consumer.
“We see 2023 Chinese demand growth averaging 1.6 million bpd year-on-year before slowing sharply to 640,000 bpd in 2024 as a more challenging macroeconomic environment materializes, with traditional demand drivers such as GDP reasserting their influence after the turmoil of the pandemic period,” the IEA said.