Global surplus crude production dives in May, Russian oil cited -U.S. EIA

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Global surplus crude production capacity in May 2022 was less than half its 2021 average, as Western sanctions on Russia for its invasion of Ukraine took hold, the U.S. Energy Information Administration (EIA) said on Friday.

The EIA estimated that spare capacity decreased by 80% in non-OPEC countries as of May from a year earlier, while surplus capacity from the Organization of the Petroleum Exporting Countries (OPEC) declined to 3.0 million bpd by May 2022 from 5.4 million bpd a year earlier. The EIA estimated that as of May, producers in non-OPEC countries had about 280,000 barrels per day (bpd) of surplus capacity, down sharply from 1.4 million bpd in 2021. It said 60% of the May 2021 figure was from Russia.

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The United States and Europe have imposed sanctions targeting Russia’s oil exports following its invasion of Ukraine on Feb. 25. These measures include export controls, a U.S. ban on Russian energy imports and a partial EU ban on energy imports.

EIA defines surplus capacity as the maximum existing capacity that can be brought online within 30 days and sustained for at least 90 days.

The EIA report did not mention whether it accounted for Russian oil being supplied to China and India in May. Recent data from those Asian countries showed that Russia displaced Saudi Arabia as top supplier to China and was now the No. 2 supplier to India in May as refiners in those countries scooped up discounted supplies from Moscow despite the sanctions. (Reporting by Arundhati Sarkar in Bengaluru; Editing by David Gregorio)

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