MOSCOW – Global supply on the oil market is expected to go up by 1 million barrels per day in 2021 after a decrease by 6.6 million barrels per day in 2020 mainly due to OPEC+ nations, the International Energy Agency (IEA) said in a report obtained by TASS.
Meanwhile, the agency considers an additional increase in global supply possible amid recovery of oil demand in the second half of 2021.
OPEC+ countries will continue gradually easing crude production cuts to 5.8 million barrels per day in the second quarter of 2021 and hold them by the end of the agreement’s term, meaning April 2022, according to the report.
“For OPEC+, we have assumed a gradual easing of cuts during 2Q21 to a reduction of 5.8 mb/d versus the October 2018 reference, which it holds through 1Q22 (first quarter 2022),” the report said.
The International Energy Agency also said OPEC+ countries will be able to reclaim their market share lost since 2016 if shale production in the United States does not grow.
American companies are now more concerned about debt recovery than new investments in production growth.
Higher crude prices could also provide an incentive to increase production by the US shale industry, which saw the biggest fall in output last year, the agency noted.
“For now though, companies seem committed to pledges made to keep production flat and instead use any price gain to pay down debt or to boost investor returns. If they stick to those plans, OPEC+ may start to reclaim the market share it has steadily lost to the US and others since 2016. (AI/MTVN/TASS)