In 2023, the world produced an estimated 101.8 million barrels per day (b/d) of petroleum and other liquids: mostly crude oil but also lease condensate, natural gas liquids, biofuels, and other liquids from hydrocarbon sources. We expect the global petroleum and other liquids supply to increase by about 0.4 million b/d in 2024 and 2.0 million b/d in 2025. This growth will be driven primarily by rising crude oil production from four countries in the Americas—the United States, Guyana, Canada, and Brazil—which would partially offset near-term voluntary production cuts in 2024 that we expect from countries participating in the OPEC+ agreement.
Collectively, OPEC+ countries accounted for 43% (43.7 million b/d) of global liquids production in 2023. We forecast that OPEC+ petroleum liquids production will fall by 1.0 million b/d this year and then increase by 0.9 million b/d in 2025 after most existing production cuts expire. We assume OPEC+ members will maintain some voluntary production cuts through 2025 to offset slow demand growth. The OPEC+ production targets are based on crude oil volumes rather than all petroleum liquids, and we expect the crude oil portion of production in these countries to decline by 1.1 million b/d in 2024 and then increase by 0.9 million b/d in 2025.
Total petroleum liquids production outside of OPEC+ grows by 1.4 million b/d in 2024 and another 1.1 million b/d in 2025 in our forecast. Although we expect most of this growth will come from the United States, we expect petroleum liquids production in Canada, Brazil, and Guyana to each increase by 0.3 million b/d through 2025, which limits significant upward crude oil price pressure in our forecast. Mexico is the only country in the Americas that participates in OPEC+ agreements, so these agreements have little influence on production in the Americas. Although Venezuela is an OPEC member, it is exempt from the OPEC+ agreement, and Ecuador left OPEC in 2020
Crude oil prices over the past 20 years have been sufficiently high to drive the long-term development and completion of projects in the Americas. Some of those projects include oil sands production in Canada and floating production and storage offshore vessels off the coasts of Brazil and Guyana. Recent crude oil prices have also supported the technological change that has increased crude oil production from tight oil formations in the United States.
Four countries account for more than 80% of global supply growth in our forecast
The United States continues to produce more crude oil and petroleum liquids than any other country. After falling to less than 10.0 million b/d in mid-2020, U.S. crude oil production increased to 13.3 million b/d in late 2023 as a result of increased drilling efficiency. Despite a brief decline in early 2024 due to winter weather disruptions, we expect production of petroleum liquids in the United States to increase by 0.4 million b/d in 2024 and by 0.8 million b/d in 2025.
Canada’s crude oil production has also grown steadily over the last decade, driven by the development of oil sands production in Alberta. Most recently, however, growth in this region has slowed because of distribution bottlenecks limiting the ability to move the crude oil beyond domestic refining markets, including to refiners along the U.S. Gulf Coast. The Trans Mountain Expansion (TMX) pipeline project, which could come on line this year, is designed to increase Canada’s access to global crude oil markets from ports on the Pacific Coast.
Trade press sources indicate the TMX pipeline is nearly complete and that the Trans Mountain Corporation plans to bring it on line sometime in the first half of 2024. We expect nearly 600,000 b/d of new takeaway capacity—which will effectively triple the region’s current takeaway capacity—will reduce the current discount for Canada’s crude oil and drive increased production.
In Brazil, a number of significant offshore oil discoveries are in development, which is increasing crude oil production in the country. Floating production and storage offshore (FPSO) vessels in the pre-salt fields of Tupi, Buzios, and Sapinhoá in the Santos Basin, as well the recent start-up of FPSO production from the Mero field in the Campos Basin in the South Atlantic, have increased production. Petrobras (Brazil’s national oil company) has announced plans for 11 new FPSO vessels through 2027. We expect several of these to be on line and growing Brazil’s production through 2025.
Guyana has increased its oil production remarkably in its very short history as a major oil producer. After first discovering crude oil in 2015 and beginning production in late 2019, the rapid development of the Liza project and, more recently, the Payara project increased Guyana’s crude oil production to 645,000 b/d in early 2024, according to Exxon estimates. We forecast the start-up of the Yellowtail project will help increase Guyana’s petroleum liquids production by an additional 100,000 b/d in 2025, and Guyana’s total petroleum liquids production will exceed 0.8 million b/d in fourth-quarter 2025.
Project delays and transit issues could affect global supply and trade flows
Much of the growth in oil production in these countries is the result of long-term projects that have been in development for several years and, therefore, we assume are likely to come on line before the end of 2025. The exact timing of any project’s start-up, however, is less certain because issues around permitting, capital requirements, technical hurdles, or other unforeseen delays are possible.
In addition, changing global trade flows could affect the ability of these new sources to reach global markets. Specifically, the ongoing attacks on ships in or near the Red Sea are affecting trade routes and, if they escalate, they could limit the ability to freely or economically move oil to global markets. Similarly, ongoing developments around relatively low water levels in the Panama Canal, which have been easing, could affect trade flows, The availability of the Panama Canal shipping channel is important in order for many of these crude oil barrels to efficiently reach foreign markets.
