MOSCOW (MRC) -- Disruptions to crude oil and condensate production from members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries have risen considerably since last year, said Hydrocarbonprocessing.
These outages have contributed to reduced liquid fuel supply and, along with crude oil production declines agreed to among OPEC and partner countries (OPEC+), have contributed to global liquid fuels inventory draws since June. So far in 2020, monthly oil supply disruptions have averaged 4.6 MM barrels per day (bpd) and reached 5.2 MM bpd in June, the highest monthly levels since at least 2011, when the U.S. Energy Information Administration (EIA) began tracking monthly liquids production outages. Global oil supply disruptions averaged 3.1 MM bpd in 2019, and rising outages in Iran have been the main drivers of the year-on-year increase. EIA does not include field closures for economic reasons or oil demand declines in its accounting of supply disruptions.
Libya, Venezuela, and Iran (the OPEC countries exempt from the latest OPEC+ agreement) were the main contributors to these outages. Domestic political instability in Libya has removed about 1.2 MM bpd from oil production since February 2020. The Libyan National Army, the warring faction in eastern Libya, blockaded five of the country’s oil export terminals and shut in oil production from major fields in the southwestern region in January 2020, causing Libya’s production to fall to less than 100,000 bpd by April.
U.S. sanctions have led to production outages in Venezuela and Iran. U.S. sanctions placed on oil-trading companies and shipping companies that facilitated exports of Venezuela’s crude oil in the first half of 2020 removed 500,000 bpd of crude oil production from global markets by August. Ongoing U.S. sanctions on Iran’s crude oil and condensate exports have kept Iran’s disruption levels elevated through 2020, and disruptions there have increased by another 100,000 bpd since January.
Non-OPEC oil supply disruptions, mostly from the United States and Canada, rose to nearly 800,000 bpd in August. Disruptions in Canada occurred when operators ordered nonessential staff to stop work because of coronavirus outbreaks at production sites. In the United States, hurricane-related disruptions and unplanned maintenance affected oil production this summer. Other non-OPEC countries experienced temporary field closures for various reasons such as coronavirus outbreaks among workers, logistical issues moving workers or equipment during the pandemic, fires at field operations in Canada, or other natural disasters.
As MRC informed earlier, crude oil futures fell during the mid-morning trade in Asia Nov. 13, extending overnight losses, after the US Energy Information Administration data showed a large build in US crude inventories, while concerns over the progression of the coronavirus pandemic continued to weigh on the market.
Iin September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
EIA publishes historical unplanned production outage estimates in its Short-Term Energy Outlook (STEO). In its estimates of outages, EIA differentiates among declines in production resulting from unplanned production outages, permanent losses of production capacity, and voluntary production cutbacks. EIA’s estimates of unplanned production outages are calculated as the difference between estimated effective production capacity (the level of supply that could be available within one year) and estimated production.