Source: Bloomberg, Unigestion, as of 30.09.2021.
OPEC has chosen to adopt a strategy to gradually increase oil output as it expects demand to remain firm in the coming years. Indeed, looking at our chart, we can see that OPEC does have spare capacity and therefore the means to increase production significantly in theory. Without taking into account Iran, for obvious reasons, OPEC spare capacity currently sits at around 6+ million barrels per day.
Several OPEC members such as Nigeria and Angola have struggled in recent months to increase output, the result of a decade of underinvestment or maintenance that has constrained their ability to increase supply. The potential increase in supply from spare capacity therefore rests primarily on the two largest producers, Saudi Arabia and the UAE, which together represent 50% of spare capacity.
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