OPEC to be key factor to price recovery until 2040
Despite the fact that non-OPEC production will ensure supply to 2030, OPEC has to continue leveraging its available reserves. This is what Wood Mackenzie says, noting that OPEC will be the key to price recovery through 2040.
Despite the fact that non-OPEC production will ensure supply to 2030, OPEC has to continue leveraging its available reserves. This is what Wood Mackenzie says, noting that OPEC will be the key to price recovery through 2040.
As described in Wood Mackenzie's Macro Oils Long-Term Outlook H1 2018, the US Lower 48 will continue its strong performance. It also expects crude and condensate production to reach around 11 million b/d in the mid to late-2020s, adding 4.2 million b/d to global supply by 2025. Outside the US, Brazil and Canada will be the countries which will add the most non-OPEC production by 2030.
In addition, strong pre-salt developments will increase Brazil's production each year to 2030 by 130,000 b/d, while Canada's production will increase due to oil sands projects. Over the next ten years, Wood Mackenzie expects output to increase a further 750,000 b/d.
What is more, Russia's production is about to increase as we enter 2020s before declining later on. However, some mature provinces, such as the North Sea, will maintain output levels into the mid-2020s.
New producers such as Guyana, Uganda and Kenya will add significant volume, which will tackle structural declines from mature producers through 2030.
Concluding, Wood Mackenzie states:
"With demand continuing to grow through to its peak in the mid-2030s, the industry must find increasingly expensive oil to offset declines from a maturing asset base. However, as reliance on OPEC ramps up, so does the importance of geopolitical risk as a key determinant for both supply and price."
