- Global oil production exceeded consumption by just over 1 billion barrels in 2014/15
- Of the 1 billion barrels reportedly produced but not consumed:
- roughly 420 million are being stored on land in member countries of the OECD
- Another 75 million barrels are thought to be stored at sea or in transit by tanker
That leaves 550 million “missing barrels” unaccounted for, apparently produced but not consumed and not visible in the inventory statistics (“Oil Market Report”, IEA, Feb. 2016)
The last time (“missing barrels”) was this large and positive (implying an oversupplied market) was in 1997/98:
- Critics then accused the IEA of over-estimating supply, under-estimating demand
- In 1997/98 episode, the IEA concluded most of the missing barrels went into non-OECD storage and uncounted OECD inventories
- In the current episode, it is also very likely some of the 550 million barrels unaccounted for in 2014/15 have gone into unreported storage outside the OECD.
- China’s government is known to have been filling its Strategic Petroleum Reserve. More barrels are likely to have gone into commercial storage in China and in other countries outside the OECD.
- But it is at least possible some of the missing barrels have been caused by the IEA over-estimating oil supplies or under-estimating demand
An interesting read from Reuters with potential implications for the extent of the oil glut.