Update on incremental world crude and condensate oil production Oct 2024
What happened to peak oil after conventional crude oil started to peak in 2005 at 74 mb/d? Here is a graph showing the changes in crude oil production:
Fig 1: World incremental crude and condensate production January 2004 – October 2024
The graph is not zero scaled with almost 51 mb/d in “Base production”. How incremental production is calculated, please see the Appendix. Countries are stacked in following order: declining, peaking in the period 2004-2024 and growing.
We can see many production and price spikes and peaks. 2 events stand out: The oil price shock in 2008 which was caused by peaking conventional crude production in 2005 (and an additional Chinese oil demand for the Beijing Olympic Games) and then the Wuhan virus in 2020. Both these events have increased debt and result in additional future interest payments. So it is very important to understand this history. The problem is permanent and will not go away easily. The following graph shows the debt in the US:
Fig 2: US debt with data from the US Federal Reserve and WTI oil prices from EIA
https://fred.stlouisfed.org/series/GFDEBTN
The US debt curve shows several upward kinks:
a) the US recession in 2002 and the Iraq war…
Iraq war and its aftermath failed to stop the beginning of peak oil in 2005
16/3/2013
https://crudeoilpeak.info/iraq-war-and-its-aftermath-failed-to-stop-the-beginning-of-peak-oil-in-2005
….followed by rising oil prices,
b) the US recession in 2007 together with the 2008 oil price shock
Causes and Consequences of the Oil Shock of 2007–08
Spring 2009, by James D. Hamilton, University of California, San Diego
https://www.brookings.edu/wp-content/uploads/2016/07/2009a_bpea_hamilton-1.pdf
c) the Wuhan virus in 2020.
That’s why we have to watch Elon Musk saying during a press conference in the Oval office, 11 Feb 2025:
“So we got a US$ 2 trillion deficit [in 2024] and if we don’t do something about this deficit the country’s going to be bankrupt. I mean it’s really astounding that the interest payments alone [US$ 892 bn] on the national debt exceed the Defence Department Budget”
Fig 3: Screen shot of Musk and Trump in the Oval office
https://www.youtube.com/watch?v=L0f-ZAVOoPk
Whether Elan Musk’s DOGE is the proper way to reduce debt, is another question.
Let’s continue to analyse oil production.
Declining group
Fig 4: Incremental crude production of countries in decline (not zero scaled)
In this group of countries, crude production declined from 19.7 mb/d in 2004 to 10.8 mb/d in 2019 or at a compound rate of -3.3%. There was a short surge end of 2019 caused by Norway (eg. Johan Sverdrup field) and shaped by a drop in production in Nigeria and Venezuela.
Since mid 2020 (with Covid raging and difficulties to get oil workers) production in this group is on a bumpy production plateau (9.8 mb/d in 2024) where declines are offset by an uptick in Argentinian and Venezuelan production.
The above graph shows that Venezuela declined considerably after 2016 due to a combination of geological factors (peak oil in conventional oil fields….
Peak oil in Venezuela: El Furrial field
26/5/2018
http://crudeoilpeak.info/peak-oil-in-venezuela-el-furrial-oil-field
….and difficulties to develop extra heavy oil) and political factors (socialismo au muerte) which resulted in an increasing number of various financial and sectoral sanctions between 2017 and 2019 under Trump. The Biden administration gave a licence to Chevron to restart production and exports to the US in Nov 2022 (+200 kb/d according to the EIA) but anti-democratic actions by the Maduro government continued. Trump just announced he will cancel the Chevron licence.
An overview of US sanctions on Venezuela can be found in the Congressional Research Service paper dated Dec 2024: https://crsreports.congress.gov/product/pdf/IF/IF10715
It is to be noted that since 2000, the share of extra heavy oil (API 8°-10°) in total production has increased to 60% and in exports now to 70-80%. In 2024, Venezuela exported 772 kb/d Merey 16 (API 16°) and had to import 92 kb/d light oil and naphtha (from US, Iran and Russia) as diluent for the extra heavy oil to get it flow through pipelines. Thus, exports and therefore production is limited by these diluent imports as locally available Santa Barbara light oil is not enough.
Peaking group
These are countries which in the period since 2004 first increased production, peaked around 2010 and then declined.
Fig 5: Incremental crude production of countries which peaked in the period 2004-2024
Production in this group started with 6.9 mb/d in 2004 and peaked at 8.9 mb/d in 2010 and declined by 1 mb/d to 7.7 mb/d by 2019. The Wuhan virus caused another drop of 1 mb/d in just 6 months in the first half of 2020. Since then production has either stabilized or very gently declined to 6.5 mb/d in 2024, slightly less than 2004.
Growing Group
Fig 6: Incremental crude production of growing countries
Production increased from 41.5 mb/d in 2005 to an average of 59.4 mb/d in 2019, a growth of 17.9 mb/d.
Most of the increase in the United States is from shale oil which fundamentally improved oil trading for the US:
US crude exports 2014 – August 2024
19 Nov 2024
https://crudeoilpeak.info/us-crude-oil-exports-2014-to-august-2024
US crude oil imports by gravity and country of origin (part1)
14 Nov 2024
https://crudeoilpeak.info/us-crude-oil-imports-by-gravity-and-country-of-origin-part-1
US crude oil imports by gravity and country of origin (part2)
14 Nov 2024
https://crudeoilpeak.info/us-crude-oil-imports-by-gravity-and-country-of-origin-part-2
The Wuhan virus hit very hard. Production dropped from Dec 2019 to June 2020 by a whopping 9.8 mb/d.
Fig 7: Impact of Wuhan virus on selected countries in the growth group
Production drops in 6 months were between -15% and -24% with the 3 largest producers most affected. Ironically, if the Chinese data are correct (and not embellished), this country reduced production only marginally.
The impact of the Wuhan virus on the world economy was worse than the global financial crisis following the 2008 oil price shock.
10 Mar 2020
Impact of Corona Virus similar to some earlier peak oil scenarios
http://crudeoilpeak.info/impact-of-corona-virus-similar-to-some-earlier-peak-oil-scenarios
We had:
• Less road traffic AS IF there had been petrol shortages
• Empty shelves in warehouses and shopping centres AS IF we had diesel shortages
• Less or no flights AS IF we had jet fuel shortages
• Supply chain issues AS IF there were fuel oil shortages for containerships
This tells us what will happen in the next oil crisis.
The Wuhan virus was an own goal. It stopped Chinese oil imports from growing
Fig 8: China crude oil production 4 mb/d since 2010, peak imports start 2020
The world economy was permanently damaged as debt was increased.
Wild card group (geopolitical)
Fig 9: Incremental production Iran and Libya
Summary table
In summary, 20% of production has peaked, 74% has only recently peaked and is therefore uncertain, 6% is on a bumpy plateau and dependent on geopolitics.
Conclusion
US shale oil rescued the world from a deep oil crisis in 2010 but it came too late and at a huge cost in terms of debt.
Appendix
What is incremental crude production? It is the change of oil production during a given period. How is it calculated? For each country, the minimum production in the period is found. It is the “base production” which was achieved in all months. The incremental production is then the difference between the monthly production data and this base production.
Why is this being done? To show the changes more clearly in the graphs. If one stacks full production profiles the individual contributions from each country would show up as very small, making analysis more difficult.
WIP, will be continued by looking at details between 2016-2024 as in the above Iraq graph
25 Mar 2025
Post-Covid crude production in world outside the US still lower than end 2018
https://crudeoilpeak.info/post-covid-crude-production-in-world-outside-the-us-still-lower-than-end-2018
