Oil supply long-term outlook H1 2017: US tight oil vs conventional
Stable oil prices since the OPEC agreement to cut production in late 2016 have led to a return in near-term growth, driven primarily by onshore US supply. The pace of growth onshore US and from other non-OPEC sources including Brazil, Russia and Canada, poses a major challenge for OPEC in the short-term. We have made strong upward revisions to our supply outlook since H2 2016, weighted towards non-OPEC producers. OPEC crude oil capacity in the longer term has been revised down, mainly due to a downgrade in Venezuela, where the pace and potential supply of heavy oil has been lowered. This is offset by growth in Iran and Iraq and recovery in Libya in the near-term.