Saudi Arabia’s average oil production increased since the beginning of 2022 until the end of August by 20 percent, a government document seen by Saudi Gazette showed. The Kingdom’s production reached around 10.5 million barrels per day, higher by 1.8 million barrels per day compared to the same period last year.
The increase is due to the efforts by the OPEC+ agreement to support market stability and the performance efficiency for the benefit of the participants in the market and the petroleum industry. Saudi Arabia expects the real GDP growth to reach 8 percent in 2022, driven by real GDP growth in oil activities and the sustained levels of growth in the non-oil activities, which is expected to record growth of 5.9 percent in 2022. According to the OPEC monthly report on oil markets in August of 2022, global demand for oil is expected to register a growth of 3.1 million barrels per day compared to last year, to reach 100.03 million barrels per day. Global demand for oil in 2023 is expected to grow by around 2.7 million barrels per day, to reach 102.72 million barrels per day.
It is worth noting that the share of the non-OECD countries constitutes the largest percentage of the growth in 2023, which is around 2.1 million barrels per day. The report attributes this increase to the economic recovery in these countries and the increase in demand for fuel in the transport, industry, and petrochemicals sectors. The average price of Brent crude futures increased, since the beginning of 2022 until the end of August, by 55 percent to record around $104.04 per barrel, compared to $67.06 per barrel during the same period last year. The average prices of Brent crude futures have recorded their highest levels since 2008, with the closing price reaching $127.98 per barrel on March.8, 2022.
Despite uncertainty in the global markets during this year in the midst of the geopolitical events, the severe economic concerns and the tightening of the monetary policies to curb inflation around the world, the oil market has been characterized with stability compared to other energy markets such as natural gas, coal, and electricity. The OPEC+ agreement contributed to supporting stability of the oil market in particular, and balancing supply with the gradual recovery in global demand for oil after the Coronavirus pandemic has faded.