July 12, 2025

Second Half Flood?!

OPEC Plus is on track to raise their quotas by about 2.2 MMBO/D by October for this year. There will be some differences between quota growth and actual production growth. Some producers (e.g. Iraq, UAE) are already above quota, so their ramp may be less. Some producers may struggle to hit their quota (e.g. Nigeria).

Regardless, if OPEC Plus follows through, supply will surge (chart GlbOPECPlProj).

Supply is already starting to ramp up (chart GlbOPECPl). Countries like Brazil, Argentina, Guyana, and Norway are all expected to add production. The IEA expects non-OPEC production to grow about 1 MMBO/D.

Our estimate of demand indicates that demand is flat to down this year (chart GlSDDif2025). However, OPEC expects demand to grow about 2 MMBO/D by the end of the year. This might explain why OPEC Plus believes they can return that shut-in production quickly.