U.S. crude oil production is set to outpace previous expectations, reaching 13.19 million barrels per day (b/d) this year, a slight increase from the initial projection of 13.1 million b/d, according to the Energy Information Administration’s (EIA) Short-Term Energy Outlook released March 12.
This surge is expected to provide a crucial buffer to global supplies as OPEC and its allies continue to restrict output.
The EIA anticipates a further increase in U.S. oil production, projecting it to rise to 13.65 million b/d next year, reflecting a 1.2% uptick from the previous forecast.
Guyana is one of four incremental oil producers in the world – S&P | OilNOW
While acknowledging the potential for fluctuations in the EIA’s forecasts, the report said the market remains attentive to any indication of the impact of production cuts by the Organization of Petroleum Exporting Countries (OPEC) and its allies on global supply dynamics and, consequently, oil prices.
Despite the upward trajectory in production from major players like the U.S., Guyana, Brazil, and Canada, the EIA emphasizes a potential shortfall in global output compared to consumption, estimating a deficit of 260,000 barrels per day (b/d) for this year.
Interestingly, this trend is expected to reverse in the following year, with the agency forecasting a surplus of 360,000 b/d. Guyana, in particular, plays a significant role in shaping this landscape.
Guyana has only been a producer for under five years. The backbone of Guyana’s impact lies in the output from the Stabroek Block projects, which currently exceeds 600,000 barrels per day (b/d), surpassing initial projections. The projects can produce 645,000 b/d, exceeding the initial targets for the projects by a collective 85,000 b/d.
And the desire for its low-cost, low-carbon barrels only continues to increase. S&P Global’s Richard Swann has identified Guyana’s oil as a potential replacement for Russia’s Ural oil in the global market. The opportunity came about after Russia invaded Ukraine and faced sanctions from Western nations.
