“Under the refinery capacity, the downstream sector in OECD countries declined sharply, while Asia and the Middle East added capacity”
* Proven crude reserves increased by 0.2%, gas reserves fell by 0.4%
By Teddy Nwanunobi
World refinery capacity fell by 300,000 barrels per day (bpd) to a total 101.1 million bpd in 2020, the Annual Statistical Bulletin (ASB) released by the Organisation of Petroleum Exporting Countries (OPEC) on Thursday revealed.
The report also revealed that the global proven crude reserves increased 0.2 per cent in 2020, despite the crash in prices that has stifled industry investment.
According to the OPEC’s annual assessment of the oil market, the proven natural gas reserves fell by 0.4 per cent to 206.7 Tcm.
Valuechain reports that OPEC members hold 73.7 Tcm of the proven gas reserves.
Proven crude reserves stood at 1.549 trillion barrels at the end of 2020, up from 1.546 trillion barrels at the end of 2019, with OPEC’s 13 members holding 1.237 trillion barrels of those reserves, or 80 per cent of the world total, according to the study.
Under the refinery capacity, the downstream sector in OECD countries declined sharply, while Asia and the Middle East added capacity.
Earlier in the week, OPEC forecast in its World Oil Outlook (WOO) that 14mbpd of global refining distillation capacity would be added between 2021 and 2045, led by Asia, the Middle East and Africa.
Refinery throughput fell a historic 9.1 per cent to 78.0mbpd in 2020, with fuel consumption hard hit by the pandemic, according to the 56th edition of the ASB.
The report came just ahead of the October 4 meeting between OPEC, Russia and nine other allies, who have been coordinating on a series of production cuts since 2017.
The online meeting will determine the group’s output levels for November, with the group currently committed to increasing production by 400,000 b/d every month through the end of 2022, though ministers have said they reserve the right to adjust the plan depending on market conditions.
Crude oil production declined in 2020 by 8.2 per cent, a historic year-on-year fall, to 69.09mbpd, according to the study.
OPEC production fell 12.7 per cent.
Global oil demand dropped by 9.30mbpd year-on-year to 90.73mbpd in 2020, with consumption in non-OECD countries dropping for the first time in history, the report showed.
The WOO projected demand would average 96.6mbpd in 2021, 99.9mbpd in 2022 and 101.6mbpd in 2023, when it would finally surpass pre-pandemic levels.
To meet the world’s need for oil through 2045, some $11.8 trillion of oil industry investment would be needed, 80 per cent of it in the upstream sector, the outlook said.
In his remarks, the Secretary General of OPEC, HE Mohammad Sanusi Barkindo, emphasised the crucial importance of data accuracy and transparency to supporting stability in the global oil market.
“We, at OPEC, are dedicated to enhancing data transparency through broad dissemination of accurate and timely oil and gas data, not only for the ASB, but for all of our publications. Indeed, maintaining transparency in all that we do underpins our core goal of establishing sustainable oil market stability,” he said.
The key highlights of the annual publication include:
· Total world crude oil production declined in 2020 by 6.15mbpd, or 8.2 per cent, as compared to 2019, to average 69.09mbpd, marking a historical year-on-year drop notably after the outbreak of the COVID-19 pandemic. OPEC crude oil production declined sharply year-on-year by 3.72mbpd, or 12.7 per cent, while crude production by non-OPEC countries fell by 2.43mbpd, or 5.3 per cent.
· With an average of 90.73mbpd in 2020, world oil demand was heavily impacted by the COVID-19 pandemic and fell by a historic 9.30mbpd y-o-y. OECD oil demand fell sharply in 2020, while in the non-OECD it declined for the first year in history. Oil demand in OPEC member countries was sluggish in 2020, losing 8.2 per cent y-o-y. Distillates and gasoline accounted for around 55.1 per cent of 2020 world oil demand with a steep downward trend, amid COVID-19 containment measures. Residual fuel oil requirements were about 7.1 per cent of total oil demand in 2020.
· OPEC member countries exported an average of 19.70mbpd of crude oil in 2020, a sharp decrease of about 2.78mbpd, or 12.4 per cent, compared to 2019 and marking the fourth consecutive annual decline. Following the pattern in previous years, the bulk of crude oil from OPEC member countries – 14.43mbpd or 73.2 per cent – was exported to Asia, particularly China and India. Considerable volumes of crude oil – about 3.13mbpd – were also exported to OECD Europe in 2020, which, however, represents a decline compared with 3.74mbpd recorded in 2019. OECD Americas imported 0.84mbpd of crude oil from OPEC member countries, which was about 0.38mbpd, or 31.1 per cent, less than the 2019 volumes.
· Exports of petroleum products from OPEC member countries averaged 3.48mbpd during 2020, down by around 0.40mbpd, or 10.4 per cent, compared to 2019. Imports of petroleum products by OPEC member countries averaged at 1.52mbpd in 2020, roughly 0.17mbpd, or 9.8 per cent, lower than in 2019.
· World proven crude oil reserves stood at 1,549 billion barrels at the end of 2020, increasing by 0.2 per cent from the level of 1,546 billion barrels recorded at the end of 2019. Proven crude oil reserves in OPEC member countries increased by 0.3 per cent to 1,237 billion barrels at the end of 2020, following a firm increase during 2019.
· At the end of 2020, world proven natural gas reserves fell by 0.4 per cent to approximately 206.7 trillion standard cubic metres (cu m). Proven natural gas reserves in OPEC member countries stood at 73.74 tr standard cu m at the end of 2020, down 1.4 per cent from the level at the end of 2019.
· World refinery capacity shrank by 0.3 m barrels/calendar day (bpcd) to stand at 101.1 m b/cd during 2020. The non-OECD region, particularly China, other Asia and the Middle East, recorded refining capacity additions. Refinery capacity in the OECD declined sharply in 2020, as compared to 2019. Globally, refinery throughput fell by a historic 9.1 per cent to reach 78.0mbpd in 2020, amid bearish oil demand during the COVID-19 pandemic.
· The OPEC Reference Basket (ORB) averaged $41.47 per barrel (pb) in nominal terms during 2020, down from $64.04pb in 2019, a strong decrease of $22.57pb, or 35.2 per cent. The volatility level was $12.55pb, or 30.3 per cent, relative to the yearly average.