Oil supply is related to the issues facing the industry, such as the demand for oil, prices, investment, crude oil quality, refined product taxation and the environment.
Since. 1985/1986, the demand for oil has increased across all regions with the exception of the former Soviet Union and Eastern Europe due to the fall in oil prices, slowdown in substitution and conservation and the increase in economic activity.
Since the break up of the former Soviet Union, there has been a sharp decline in the production in addition to the obvious slide in the production of the United States. These changes could not be offset by the production increases in developing countries and the North Sea.
Due to its resource base, OPEC will play a major role in future supplies. This paper will discuss this role in the context of the above developments to the year 2010. OPEC supplies, whether in crude oil, NGL or products, will be estimated in the light of available information.
Any discussion of oil supply must involve other issues facing the oil industry, such as demand evolution and outlook, components of supply, crude oil quality, the refining industry, taxation and the environment. In this context, this paper will discuss OPEC oil supply in the last few years and attempt to project its development to the year 2010.
Since the decline of oil prices towards the end of 1985, the demand for oil has increased world-wide, by about 7 mb/d (1.1 Mm3/d) to a level of 65.11 mb/ d (10.4 Mm3/d) in 1992. The recovery of demand occurred across all regions with the exception of the former Soviet Union (FSU) and Eastern Europe, where demand actually fell by about 1.5 mb/d (240 km3/d) during that period. The underlying factors which have led to the increase in demand are the fall in oil prices thereby giving oil a more competitive position in the energy market, the subsequent slowdown in substitution and conservation efforts which were more evident between 1980–1985, and the economic growth in the industrial and developing countries, especially in the first few years that followed 1985. (Table I).
On the supply side, the changes have been less dramatic, although the sharp decline in the production of the United States and the FSU could not be offset by increases in China and other non-OPEC countries. However, the net decrease in non-OPEC supplies is about 1.2 mb/d (1010 km3/d). Therefore, OPEC production of crude oil and natural gas TABLE I World oil demandlsupply balances, 1985-1992 (mb/d) 1985 1990 1991 1992 World oil demand 58.21 64.57 64.77 65.1 1 World oil supply 57.73 64.98 65.17 65.44 Non-OPEC supplies 40.45 40.40 40.13 39.25 OPEC supplies 17.29 24.58 25.04 26.18 OPEC % 29.9 37.8 38.4 40.0 liquids (NGL) incre