The Biden Surge -- Will One Million Bbls Of "New" Oil Per Day Make A Difference -- March 30, 2022

The Biden Surge is tracked here. 

That's the million-dollar question, or as we used to say, the $64,000-question: will one million bbls of "new" oil per day make a difference?

This takes me back to a "not-ready-for-prime-time" post, February 19, 2018.

Buried in that post is a link to (I suppose it's the most recent) March 8, 2022, EIA short-term energy outlook. That means the analysts took into consideration Putin's War. 

Look at the "World Liquid Fuels Consumption" graphic:

• 2020: 92 million bpd the year of the plague
• 2021: 97 million bopd
• 2022: 101 million bopd
• 2023: 102.5 million bopd

Then look at the "World Crude Oil and Liquid Fuels Production" graphic:

• 2020: 94 million bpd
• 2021: 96 million bopd (demand-supply deficit of one million bpd)
• 2022: 102 million bopd (demand-supply deficit of one million bpd)
• 2023: 102.5 million bopd

Some argue the demand-supply deficit will be much larger. 

Earlier today, it was being argued that global supply is already short three to four million bopd on supply. OPEC+ does not have enough spare capacity to make up the shortfall, even with Iran. 

That "summer of '22" graphic at that link is pretty startling.

At this moment my thoughts: a release of one million bopd from the SPR is a wash. It could have a huge short-term (six months) psychological impact, but long term (one year) it won’t amount to much.

We've had this discussion before. Saudi is not going to let oil get below $80 / bbl, and may in fact move quickly to keep it from dropping below $90 / bbl. I have trouble believing that OPEC+ would react quickly to the Biden Surge but they will be watching closely. 

Bottom line:

• global consumption / global demand: 100 million bpd
• the Biden surge: one million bpd; one percent
• the Keystone XL: in round numbers, one million bopd