Affected by the implementation of the OPEC+ production reduction plan and the COVID-19 epidemic, global crude oil supply and demand will decrease in 2020. Industry insiders predict that in 2021, as the new coronavirus vaccines are gradually put into use, global crude oil demand will further rebound. However, due to the continued production cuts by oil-producing countries, the growth in global crude oil supply will be limited. It is estimated that for the whole of 2021, global crude oil supply will reach 98.38 million barrels per day, and demand will reach 98.8 million barrels per day.
In 2020, global crude oil supply shrank significantly, especially since May, as OPEC+ and the G20 formed a production reduction alliance and implemented large-scale production cuts, crude oil production began to decrease significantly. In 2020, the total global crude oil supply was 94.45 million barrels per day, a year-on-year decrease of 6.53%.
In the share of global crude oil supply, North American oil supply accounted for 27.7% of the total global supply, an increase of about 10 percentage points from 2010. “This is mainly due to the reduction in U.S. shale oil production. On the one hand, because the production cost of shale oil is still relatively high, the low price has dealt a heavy blow to the U.S. shale oil industry, and many shale oil explorers have announced bankruptcy; On the other hand, the United States has also joined the latest round of OPEC production cuts, causing the country’s crude oil production to drop significantly, with crude oil production falling from the highest of 13.1 million barrels per day during the year to the lowest of 9.7 million barrels per day, a drop of as much as 25.95%.” Xi Jiarui, a crude oil analyst at Jinlianchuang, said that OPEC crude oil production has been decreasing year by year due to multiple rounds of production reduction plans in recent years. At the same time, with the resurgence of U.S. crude oil production, the global oil production pattern has changed. The game between the three major crude oil producers, the United States, Saudi Arabia and Russia, has become one of the main factors influencing the trend of international oil prices. In contrast, as some countries announced their withdrawal from OPEC, OPEC’s influence has declined.
On April 13, 2020, OPEC+ countries once again reached a consensus and re-implemented the production reduction plan. According to the agreement reached by OPEC+, the production reduction plan will be implemented from May 2020 for a period of two years and will be reviewed again by relevant countries in December 2021. The plan is divided into three stages, of which production will be reduced by 10 million barrels per day from May to July 2020, 8 million barrels per day from August to December 2020, and production will be reduced by 8 million barrels per day from January 2021 to April 2022. Cut production by 6 million barrels.
Since May 2020, OPEC has significantly reduced crude oil production in compliance with the production reduction agreement, with Saudi Arabia’s production reduction being the largest. As of October 2020, Saudi Arabia’s crude oil production was 8.956 million barrels per day. Another major oil-producing country, Russia, has basically met its production reduction standards. Its crude oil output in October was 10.21 million barrels per day. Oil-producing countries that have not fully implemented the production reduction agreement will gradually make up for their share of the deficit.
In 2020, the spread of the COVID-19 epidemic around the world has seriously affected the demand for crude oil. Global crude oil demand has decreased for the first time in ten years. Although it has rebounded since May, overall crude oil consumption has It shrank significantly from the same period last year. In 2020, global crude oil demand was 92.91 million barrels per day, a year-on-year decrease of 7.68%.
Since the outbreak, many countries have adopted measures such as border blockades and travel restrictions, which have had a major impact on fuel demand. “Although crude oil demand has rebounded as countries relaxed blockades and actively resumed work and production after May 2020, overall crude oil demand in 2020 is still significantly lower than in 2019.” Xi Jiarui said that after entering the fourth quarter of 2020, As the seasons change, the epidemic is spreading again, and many countries are trying to restart blockade measures, which has also caused the market to be worried about the prospects for a recovery in crude oil demand.
In the share of global crude oil consumption, North America has experienced the most obvious shrinkage, especially the United States, where the epidemic is most severe. Its crude oil demand has fallen most significantly, which has significantly reduced crude oil prices in the entire North American region. Consumption. At the beginning of 2020, the crude oil processing volume in the United States was 16.897 million barrels per day. In May, it fell to the lowest level of the year, 12.456 million barrels per day, a decrease of 26.28%. Since then, with the arrival of the peak oil consumption in the United States in the summer, crude oil demand has picked up. As of the end of the third quarter of 2020, the crude oil processing volume in the United States had rebounded to 13.67 million barrels per day, but it was still down 19.1% compared with the beginning of the year.
The COVID-19 epidemic has also impacted the economy and energy consumption in Europe. In particular, the epidemic in Italy, the United Kingdom, France, Spain and other countries has been relatively severe. Therefore, crude oil consumption in Europe has also shrunk on a large scale. However, The rate of shrinkage is slightly slower than in North America.
“The crude oil consumption situation in Asia is the most optimistic. This is mainly due to China’s timely and appropriate measures to become the first country in the world to recover from the new coronavirus pneumonia epidemic.” Xi Jiarui said that from 2020 Since the second half of the year, China has continued to exert its efforts, with breakthroughs in both its economy and energy consumption. In particular, demand for crude oil imports has rebounded significantly. Data show that from January to November 2020, China’s crude oil imports reached 504 million tons, a year-on-year increase of 9.5%. </p
