Adnoc Hikes Output Capacity As Gulf Dominates Global Spare Capacity

27 Jan 2023 Issue: 66 / 4 By: Jamie Ingram

With the ‘Call on Opec’ forecast to rise above 30mn b/d later this year, spare capacity concerns are returning. Alongside Saudi Arabia, the UAE is one of the few producers with sizeable spare capacity and it is investing to boost this further.

Global spare oil output capacity, or more to the point the lack of it, remains at the forefront of industry concerns despite the reintroduction of relatively modest Opec+ cuts in November. These concerns aren’t yet as prominent as they were through most of 2022, but amid expectations that China’s re-opening will provide a major demand boost this year, discussion of a potential late-2023 supply-crunch is growing.

Speaking to CNBC during last week’s World Economic Forum in Davos, Aramco CEO Amin Nasser urged increased industry investment, saying that “Today we have around 2mn barrels [per day] of spare capacity. The aviation industry is still 1mn barrels below pre-Covid levels. As the aviation industry picks up in 23-24, that’s an additional 1mn barrels. China opening up will add a lot to the demand side.” (CONTINUED - 955 WORDS)