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ENERGY NEWS
MIDDLE EAST
Energy Review
OPEC Sees Oil Demand Rebound OPEC and its allies in the OPEC+ coalition reiterated at the end of April their oil production policy, which envisages the group adding 1 million bpd of supply by July, beginning with a 350,000-bpd increase in production in May. Saudi Arabia, the largest oil producer in OPEC and the biggest oil exporter in the world, will also unwind its unilateral extra 1 million bpd cut between May and July. At the Joint Ministerial Monitoring Committee (JMMC) at the end of April, OPEC Secretary General Mohammad Barkindo said that “the oil market continues to reap the benefits of the DoC’s support for sustainable oil market stability and providing a platform the global economic recovery.”
By Tsvetana Paraskova
Barkindo “highlighted the positive trajectory of the global economy, coupled with stimulus measures, progress on vaccinations and the summer travel season, as driving forces for the improving oil demand outlook in the second half of the year,” OPEC said. In the middle of May, Russia’s Deputy Prime Minister Alexander Novak said that the oil
OPEC signalled confidence in oil demand recovery.
Over the past month, Middle Eastern oil producers have started to gradually return as much as 1 million barrels per day (bpd) on the global oil market by July, expecting world demand for crude to rebound with the re-opening of major economies despite the dire situation with India’s COVID crisis.
OPEC signalled confidence in oil demand recovery both with its decision to proceed with unwinding the cuts and with its unchanged demand outlook in its latest Monthly Oil Market Report (MOMR) in May. Iran, an OPEC member exempted from the OPEC+ agreement, prepares to ramp up crude oil production and exports as indirect talks with the United States on a possible return to the so-called Iranian nuclear deal proceed and make some progress. In addition, major national oil companies (NOCs) reported strong first-quarter results and signed deals with contractors for oil and gas projects.
www.ogv.energy I June 2021
market was fairly balanced with demand slightly exceeding supply. “There is definitely a deficit on the market, that’s why oil stocks from last year are drawing down toward the five-year average,” Novak said, as carried by Russian news agency TASS. OPEC kept its global oil demand outlook unchanged and continues to see consumption rising by 5.95 million bpd in 2021, thanks to accelerating vaccination programs and rising fuel demand. The organisation revised down its estimates for global oil demand for the second quarter of 2021 by 300,000 bpd because of weakerthan-expected demand in North America in the first quarter and the COVID resurgence in India and Brazil in the second quarter. However, OPEC lifted its demand outlook for both the third and fourth quarters of 2021 by 150,000 bpd and 290,000 bpd, respectively. The higher anticipated demand in the second half of 2021 is the result of positive fuel data from the United States, while “the acceleration in vaccination programs in many regions allows for optimism,” OPEC said in its MOMR for May.
