Discuss your challenges with our solutions experts

For details on how your data is used and stored, see our Privacy Notice.

OPEC remains key to price recovery through 2040

Though non-OPEC production will ensure supply to 2030, OPEC will need to continue to exploit its available reserves.

1 minute read

Despite record-breaking gains in the Permian, strong demand growth and heightened geopolitical risk pushed Brent to USD80/bbl in May. For the market to truly rebalance, OPEC will remain key to price recovery over the short to medium term.

As outlined in our Macro Oils Long-Term Outlook H1 2018, the US Lower 48 can expect ongoing strong performance. We anticipate crude and condensate production to reach a plateau of around 11 million b/d in the mid to late-2020s, adding 4.2 million b/d to global supply by 2025.

Outside the US, Brazil and Canada are adding the most non-OPEC production by 2030.

A strong pipeline of pre-salt developments will lead Brazil's production to grow each year to 2030 by an average of 130,000 b/d, while Canada’s production continues to rise from oil sands projects. Over the next decade, we can expect output to increase a further 750,000 b/d.

Elsewhere, Russia's production increases into the early 2020s before reverting to decline. Some mature provinces, such as the North Sea, will be able to maintain output levels into the mid-2020s. New producers including Guyana, Uganda and Kenya will begin to add significant volume, which will help counter structural declines from mature producers — notably China, Indonesia, Colombia and Mexico — through 2030.

We expect total non-OPEC liquids production to lose its growth momentum and decline post-2030.

With demand continuing to grow through to its peak in the mid-2030s, the industry must find increasingly expensive oil to offset declines from a maturing asset base. However, as reliance on OPEC ramps up, so does the importance of geopolitical risk as a key determinant for both supply and price.