OPEC+ To Bring Back 5.8 Mln Bpd Of Extra Crude Oil To Buffer Losses From Canada, Mexico

KUALA LUMPUR, Feb 3 (Bernama) -- There is room for the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) to bring back an average of 5.8 million barrels per day (bpd) of extra crude oil in the event of significant supply disruptions from Canada and Mexico, assuming a similar level of utilisation in the past, according to Rystad Energy.

In a research note today, the energy consultancy said tariffs imposed by United States (US) President Donald Trump would impact oil production and logistics economics for both countries.

"These tariffs—25 per cent on Canada and Mexico and 10 per cent on China—are expected to have far-reaching global effects," it said.

Tariff Impact and Retaliation

The tariff on Canadian oil, initially considered at 25 per cent, has been set at 10 per cent, prompting Canada to retaliate with a 25 per cent tariff on US$105 billion in US imports, Rystad Energy said.

Meanwhile, Mexico and China are still formulating their response, with an estimated 15 per cent of Canada’s and Mexico’s gross domestic product at risk due to these sanctions.

Rystad Energy noted that Mexican crude production, already in decline, is expected to drop further due to tariffs on 0.5 million bpd of exports to the US.

OPEC+ Capacity and Market Considerations

The firm highlighted that OPEC+ has the capacity to produce crude oil at approximately 50.0 million bpd with historical average utilisation at around 94 per cent from 2010 to 2018.

"The total flow at stake is approximately 4.5 million bpd of the US imports though not all will be affected. 

"OPEC+ is also mindful that higher oil prices near US$90 per barrel could dampen demand and encourage non-compliance and higher leakage of barrels into the market from its members," it said.

Rystad Energy noted compliance within OPEC+ has improved significantly compared to the fourth quarter of 2024, following sustained efforts by the group.

"The signal is that OPEC+ is likely to bring supply back only to keep a ceiling on prices and is unlikely to act to lower prices as per Trump’s call," it added.

-- BERNAMA