Oil producers outside the OPEC cartel will continue to grow their crude oil production this year, so much so that it will outstrip the growth in demand, according to the Paris-based International Energy Agency (IEA).
The IEA now predicts that supply growth from non-OPEC sources will continue at a slightly higher rate of 2.1. million bpd (barrels per day), compared with 2 million bpd last year. Demand, meanwhile, will grow at 1.2 million bpd over 2020, with this being driven by signs of progress in resolving trade disputes, relatively subdued prices, and greater overall GDP growth around the world.
What this ultimately means is that even if OPEC and its partners comply strictly with the latest quotas over the whole year, other oil producers should easily meet the increased demand. OPEC now only needs to contribute 28.5 million bpd of crude oil to meet global demand. This, of course, assumes that production remains stable around the world. The IEA highlights Iraq as being particularly exposed to the ongoing tensions between the United States and Iran, with the latter occasionally threatening the Strait of Hormuz, upon which Iraq is heavily reliant as a shipping lane for its crude oil exports.
Despite the possible ramifications of the tensions with Iran, oil markets have been relatively unworried about supply disruptions. This is likely due to well-stocked global inventories and a growing supply of US shale oil, such as that from ExxonMobil, the energy giant behind the Mobil lubricant brand.