Energy Information Administration: International Petroleum Monthly - Oil Production
The Energy Information Administration has compiled oil production statistics for 2003. Comparing December 2002 and December 2003 gives a pretty good view of the present oil situation. In December 2002 every country except Saudi Arabia and strike bound Venezuela was producing full tilt during the run up to the Gulf War. In December 2003, every country except Saudi Arabia and Iraq was at full production as demand has essentially caught up with supply.
The numbers are better than the worst of the pessimists believed--some were claiming that oil production had actually peaked in 2000 since worldwide production declined slightly in 2001 and 2002. But this decline was primarily due to OPEC production cuts that were made to force prices up. However, the numbers do contain worrisome details.
Ignoring the anomalies such as Iraq and Saudi Arabia, oil production rose by about 2.5 million barrels a day in 2003. This is just about exactly the increase needed every year between now and 2020 to keep up with demand. But a third of this increase came from Russia which surprised everybody with its production rebound in the last two years. Production grew by 800,000 barrels a day in 2003. However, in the last few months of the year this increase clearly tapered off. It seems unlikely that Russia will repeat that performance next year.
Other counties with increased production were Algeria (200,000 bpd), Iran (350,000 bpd), Libya (100,000 bpd), Nigeria (260,000 bpd), United Arab Emirates (260,000 bpd), Angola (200,000 bpd), Brazil 300,000 bpd), Canada (250,000 bpd), Mexico (185,000 bpd) and "other" (650,000 bpd).
The areas where production is growing are primarily the Caspian Sea region and deepwater areas off Africa, the Gulf of Mexico, and South America.
This growth is balanced by some serious declines in other areas; Indonesia (-100,000 bpd), Venezuela (compared with pre-strike data from 2002; -430,000 bpd), the North Sea (-430,000 bpd), Oman (-100,000 bpd), and several other smaller producers. The US continued its 30 year decline although deepwater Gulf of Mexico production has moderated the decline in recent years. In 2003, the decline in US production was only 60,000 bpd.
Overall, while production kept up with demand, and countries with increasing production still outnumber countries with declining production, the cushion of surplus capacity is growing thinner. The Suadis increased production by 800,000 bpd in 2003 and propably have little more than a million bpd excess capacity. Iraq is still not at full production but the situation there remains unpredictable. Venezuela and Nigeria are both potentially trouble spots in the coming year.
Demand is growing in the Asian countries and stockpiles are low in Europe and the US. The tightness in the market has been pushing prices up since the summer with little indication that the fundamentals will change anytime soon. The world needs another surprise like Russia to keep ahead of the game and it is very hard to see where that is going to come from.