EIA: four countries could account for most near-term petroleum liquids supply growth

Collectively, OPEC+ countries accounted for 43% (43.7 million bpd) of global liquids production in 2023. The EIA forecasts that OPEC+ petroleum liquids production will fall by 1 million bpd this year and then increase by 0.9 million bpd in 2025 after most existing production cuts expire. The EIA assumes 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 bpd in 2024 and then increase by 0.9 million bpd in 2025.

Total petroleum liquids production outside of OPEC+ grows by 1.4 million bpd in 2024 and another 1.1 million bpd in 2025 in the EIA's forecast. Although the EIA expects most of this growth will come from the US, it expects petroleum liquids production in Canada, Brazil, and Guyana to each increase by 0.3 million bpd through 2025, which limits significant upward crude oil price pressure in its 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 US.

The US continues to produce more crude oil and petroleum liquids than any other country. After falling to less than 10.0 million bpd in mid-2020, US crude oil production increased to 13.3 million bpd in late 2023 as a result of increased drilling efficiency. Despite a brief decline in early 2024 due to winter weather disruptions, the EIA expects production of petroleum liquids in the US to increase by 0.4 million bpd in 2024 and by 0.8 million bpd 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 US 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 Corp. plans to bring it on line sometime in the first half of 2024. The EIA expects nearly 600 000 bpd 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. The EIA expects 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 bpd in early 2024, according to Exxon estimates. The EIA forecasts the start-up of the Yellowtail project will help increase Guyana’s petroleum liquids production by an additional 100 000 bpd in 2025, and Guyana’s total petroleum liquids production will exceed 0.8 million bpd in 4Q25.

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