Global Oil Supply Analysis and Outlook in the Context of Russia-Ukraine Conflict

In 2022, with the rise of international oil prices and production quota cuts, OPEC+ shows a significant increase in production. Despite the outbreak of the Russia-Ukraine conflict, the biggest black swan event of 2022, Russian crude oil supply remains relatively resilient. Meanwhile, the Iranian nuclear negotiations have ended inconclusively, sanctions against Venezuela remain in place, and Libya has experienced occasional supply disruptions; US crude oil production has been slowly rebounding under the constraints of producer capex controls. 2022 saw a year-on-year increase in global oil supply of 4.47 million barrels per day to 99.64 million barrels per day, with 55% of the increase coming from OPEC+ countries. In 2023, OPEC+ will again take measures to limit production and guarantee prices. Russia's crude oil exports may be affected by sanctions imposed by European and American countries, and given that the crude oil production in the US is difficult to recover significantly, the growth of global oil supply is expected to slow down to 1.73 million barrels per day. In the medium to long term, as low carbon emission reduction becomes the global theme, upstream oil and gas capital investment will decrease, while the aging of oil fields will lead to accelerated production decline; geopolitical unrest is frequent, so part of the time there may be supply shortages, while short-term supply disruptions will intensify the volatile pattern of the oil market.