Non-OPEC+ crude supply growth to slip in 2025, Latin America to drive non-OECD output – OPEC

LONDON (ICIS)–Increases in crude oil supplies from outside the OPEC+ bloc of countries is expected to decline slightly year on year in 2025, with the US and Canada expected to remain the backbone of OECD production increases and Latin America driving the rest of the world, according to OPEC.

The group projects that crude supply growth from countries that are not signed up to the declaration of cooperation (DoC)– encompassing OPEC member states and ally nations that have agreed to coordinated production cuts – will stand at 1.1 million barrels/day next year.

Representing a modest decline from the 1.2 million barrel/day production growth OPEC projects for non-DoC nations this year, the 2025 increase is expected to drive total output from the region to 54.1 million barrels/day.

The US is expected to drive a substantial proportion of the total production growth expected from non-DoC nations, representing nearly half of the total projected growth at 0.5 million barrels/day, while Canada is expected to increase output by an average of 0.2 million barrels/day.

Latin America is expected to be the key source of non-OECD growth excluding OPEC+ countries, with output expected to grow 0.3 million barrels/day next year on average, a slight decline from the 0.4 million barrels/day projected for this year.

Interest rates, inflation, geopolitics and reduced investment in exploration and production by oil majors as players seek to clip costs are all serving to cloud the picture on future demand and output, OPEC added.

“The anticipated trajectory and pace of inflation’s decline, particularly within the services sector, are poised to influence crude oil production costs going forward,” OPEC said in its monthly oil report.

“The potential influence of the present limited investment commitment in upstream E&P projected for 2024 and 2025 on production levels remains uncertain amid an ongoing drive for efficiency and enhanced productivity throughout the industry,” the cartel added.

The organization left its 2024 non-DoC oil supply, global demand and GDP forecasts unchanged from its April report, at 1.2 million barrels/day, 2.2 million barrels/day and 2.8% respectively.

Thumbnail photo: An oil well in Jebel Dukhan, Bahrain. Source: Jakub Porzycki/NurPhoto/Shutterstock