OPEC Update, February 2025

The OPEC Monthly Oil Market Report (MOMR) for February 2025 was published recently. The last month reported in most of the OPEC charts that follow is January 2025 and output reported for OPEC nations is crude oil output in thousands of barrels per day (kb/d). In the OPEC charts below the blue line with markers is monthly output and the thin red line is the centered twelve month average (CTMA) output.

Output for December 2024 was revised higher by 59kb/d and November 2024 output was revised higher by 54 kb/d compared to last month’s report. OPEC 12 output decreased by 121 kb/d with the largest decreases from UAE (37 kb/d), Nigeria (29 kb/d), and Venezuela (17 kb/d). Libya saw an increase of 17 kb/d and most other OPEC members had small decreases of 14 kb/d or less.

The chart above shows output from the Big 4 OPEC producers that are subject to output quotas (Saudi Arabia, UAE, Iraq, and Kuwait.) After the pandemic, Big 4 average output peaked in 2022 at a centered 12 month average (CTMA) of 20849 kb/d, crude output has been cut by 2568 kb/d relative to the 2022 CTMA peak to 18281 kb/d in January 2025. The Big 4 may have roughly 2568 kb/d of spare capacity when World demand calls for an increase in output.

Most of the increase in the Other 8 OPEC nations (those OPEC 12 nations that are not part of the Big 4) came from Iran and Venezuela (about 434 of the 542 kb/d average annual increase), with the remaining 6 nations (all except Libya were subject to quotas) having relatively flat output over the 36 month period covered in the chart above (February 2022 to January 2025) . See chart below for OPEC Other 6 (OPEC 12 minus Big 4 minus Iran minus Venezuela) with an average annual increase of only 108 kb/d over past 3 years.

The increase in Iran and Venezuela’s crude output has been slowing lately so I expect OPEC other 8 output to slow to an annual rate of 200 to 300 kb/d over the next 36 months (2025 to 2027).

OECD Commercial Petroleum Stocks remain near the bottom of the 5 year range and oil prices continue to be low.

World liquids demand is unchanged from the January MOMR, but non-DOC liquids output in 2025 was revised lower by 0.1 Mb/d and in 2026 was also revised lower by 0.2 Mb/d compared to last month’s report.

OPEC has a significantly higher World liquids demand estimate than the EIA in 2024 to 2026 as shown in the chart above. I expect the EIA estimate will be closer to reality.

Peak annual refinery throughput was in 2018 at 81.7 Mb/d, for the past 4 quarters average throughput has been 81.45 Mb/d, close to the peak level.

The OPEC estimate for US tight oil in 2024 was revised 10 kb/d higher than last month’s estimate, 2025 tight oil output was revised lower by 40 kb/d and 2026 tight oil output was revised lower by 90 kb/d.

The scenario/estimate above is unchanged from last month’s update, my estimate for 2024 tight oil output is 490 kb/d higher than the OPEC estimate, 2025 is 450 kb/d higher and 2026 is 410 kb/d higher. This difference i 2024 is likely due to OPEC not including all of the tight oil formations in the Permian basin in the estimate for 2024, the EIA tight oil estimates suffer from the same problem.

The chart above uses the tight oil scenario from the previous chart (and reproduced in red in the chart above) and US C+C production minus tight oil output (aka conventional C+C) from 2008 to 2024 to forecast future US conventional output using the ordinary least squares (OLS) trend from 2008 to 2024 to forecast US conventional output from 2025 to 2035. This conventional forecast is then added to my tight oil forecast to create a forecast for US C+C output from 2025 to 2035 (in green triangles in the chart above). The peak is in 2026 at 13725 kb/d which is similar to the EIA STEO forecast from Feb 2025.

This is of concern as about 69% of the increase in World C+C output from 2008 to 2019 came from the US increase in C+C output (with about 95% or more of this increase from tight oil). From 2022 to 2026 about 80% of the increase in World C+C output came from the US increase in C+C output. If the above forecast proves accurate, I expect World output will peak by 2028.

The chart above compares my World C+C forecast from 2025 to 2035 using the Oil Shock Model (read output from left vertical axis) with the US C+C forecast presented in the previous chart and reproduced in green above (use the right vertical axis for US C+C). Note that the magnitude of the left and right vertical axes from minimum to maximum are the same (20,000 kb/d in each case) and the units on the vertical axes is kb/d. Increases in OPEC output as well as increases Canada, Brazil, and Guyana’s C+C output allows World C+C to continue increasing in 2027 and 2028.