Global crude production saw a historic year-on-year fall in 2020 amid the pandemic-driven economic slowdown that also squeezed demand for oil to record lows, according to the latest Opec data.
Total global crude production declined last year by 6.15 million barrels per day, or 8.2 per cent, to average 69.09 million bpd, making it the biggest annual drop in oil output, Opec said in its Annual Statistical Bulletin on Thursday.
Crude production by the 13-member producers’ group – which includes Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the UAE and Venezuela – also recorded an annualised decline of 12.7 per cent, or 3.72 million bpd.
Non-Opec countries' crude output fell by 2.43 million bpd, a 5.3 per cent drop from 2019, according to figures released by the group.
Oil demand was severely dented last year by the pandemic, which tipped the world economy into its deepest recession since the 1930s and disrupted the global travel and tourism sectors, which are among the main drivers of crude demand.
With an average of 90.73 million bpd, demand fell by a historic 9.30 million bpd from 2019 levels. Demand in the bloc of Organisation for Economic Co-operation and Development countries fell sharply in 2020, while it also recorded the first drop in non-OECD countries in 2020. Within Opec-member countries, demand was sluggish in 2020, losing 8.2 per cent, the Vienna-based group said.
“Distillates and gasoline accounted for around 55.1 per cent of 2020 world oil demand with a steep downward trend amid [Covid-19]," Opec said.
“Residual fuel oil requirements were about 7.1 per cent of total oil demand in 2020.”
But the outlook is brightening for the sector. The global economy has bounced back strongly and is expected to expand 6 per cent this year, according to the International Monetary Fund. Despite the spread of the more virulent Delta strain of the coronavirus, demand in 2021 is expected to grow by 6 million bpd, with global consumption hitting 96.7 million bpd, Opec said.
The oil producers' group expects demand for 2022 to exceed pre-pandemic levels, reaching 100.8 million bpd.
“Energy and oil demand have picked up significantly in 2021 after the massive drop in 2020 and continued expansion is forecast for the longer term,” Mohammad Barkindo, Opec’s secretary general, said.
The production is also rising this year as the Opec+ group of producers, led by Saudi Arabia and Russia, is bringing 2 million bpd back to the markets in 2021. It is set to decide whether to bring an additional 400,000 bpd of supply in October.
Mass vaccination campaigns across the world and the easing of Covid-related travel restrictions will further boost the global aviation and transportation sector, which will in turn drive long-term growth in oil demand, Opec said in its 2021 World Oil Outlook report on Tuesday.
Oil exports by Opec members in 2020 averaged 19.70 million bpd, a decrease of about 2.78 million bpd, or 12.4 per cent, compared to the 2019 level. It was the fourth consecutive annual decline in Opec exports.
Almost three quarters of crude from the group’s members, or 14.43 million bpd, was exported to Asian markets, particularly to China and India, two of the world’s biggest oil-consuming nations.
Last year, the group also exported about 3.13 million bpd to OECD countries in Europe, a decline from 3.74 million bpd reported in 2019. OECD nations in the Americas imported 0.84 million bpd of crude oil from Opec members, a 31.1 per cent, year-on-year drop.
Exports of petroleum products by Opec producers averaged 3.48 million bpd, down 10.4 per cent compared to 2019. Imports also fell 9.8 per cent on annualised basis to 1.52 million bpd, Opec statistics showed.
World refinery capacity shrank by 0.3 million barrels per calendar day to 101.1 million bpcd during 2020. However, the non-OECD region, particularly China and the Middle East, recorded refining capacity additions.
“Globally, refinery throughput fell by a record 9.1 per cent to reach 78 million bpd in 2020 amid bearish oil demand during the Covid-19 pandemic,” according to Opec data.
World proven crude oil reserves grew 0.2 per cent in 2020 to reach 1.54 trillion barrels. Proven oil reserves of Opec members increased 0.3 per cent to 1.23 trillion barrel.
However, global proven natural gas reserves fell 0.4 per cent to approximately 206.7 trillion standard cubic metres, with reserves of Opec member at 73.74 trillion scm, data showed.