Key oil trends 2020

In 2020 1, total OECD annual production of crude oil, natural gas liquids (NGL), and refinery feedstocks decreased by 3.4% compared to 2019, with production consistently over 130 million tons throughout the year, despite output falling due to lower demand caused by the Covid-19 pandemic 2.

A decrease in production was seen in the OECD Americas (-4.4%), while production in OECD Asia Oceania remained relatively stable (+0.1%). On the other hand, OECD Europe experienced an increase of 6.5%.

The production decline in the OECD Americas was driven by the United States, whose production fell by 5.5% compared to 2019. A similar trend was observed in Canada, who experienced a production decline of 5.1%. Mexico's indigenous production, on the other hand, dropped only slightly on a year-on-year basis (-0.2%).

Despite the effects resulted by the pandemic, production in OECD Asia Oceania remained relatively unchanged, as the production increase observed in Korea (+20.9%) was almost completely offset by decreases in the other countries, especially in New Zealand (-11.6%).

In OECD Europe, the increasing production was led by rising production in Norway (+17.8%) due to expanded plant capacity and continuous added output from the Johan Sverdrup oilfield. To a lesser extent, a few other countries were also responsible for the increase in OECD Europe's output, such as Italy (+30.7%), the Netherlands (+32.9%), and Germany (+6.0%). This increase was partially offset by drops in production mainly in the United Kingdom (-6.4%) and Denmark (-27.3%).

The OECD Americas was responsible for 85.1% of total OECD production of crude oil, NGL and refinery feedstocks in 2020, with 57.3% of this total being produced in the United States, followed by Canada (+20.1%), Mexico (+7.7%), and Norway (+7.5%).

Total OECD refinery gross output of total products had a significant decrease (-12.5%) in 2020 compared to 2019, a trend that was seen across all regions and mainly led by the OECD Americas (-13.2%), where the United States contributed 92.7% to the total decline. OECD Europe saw a drop of 11.5% in refinery output due to low utilization rates, especially in France and Italy, where refinery gross output fell by 28.0% and 16.1%, respectively. The decrease in OECD Asia Oceania (-12.1%) was mainly led by Japan (-16.4%).

Strict measures imposed by governments to contain the Covid-19 pandemic drastically reduced air and road mobility, affecting the demand for motor gasoline, road diesel and jet kerosene; hence leading to lower refinery throughputs.

Total OECD production of total gasoline decreased by 12.2% on a year-on-year basis, led by the OECD Americas, which experienced a decline of 12.0% in gasoline production, with the United States accounting for 62.6% of the total OECD decrease in refinery output of total gasoline. OECD Europe also experienced a decrease in gasoline output of 12.3%, led by the United Kingdom (-20.1%) and Italy (-18.0%). Total gasoline output in OECD Asia Oceania also declined (-13.2%) due to declines in Japan (-11.4%) and Korea (-15.1%).

 Production of middle distillates – which include jet kerosene and road diesel – decreased by 14.4% in 2020, a trend seen across all OECD regions. Leading this decrease was the OECD Americas (-15.6%), once again led by reduced output in the United States (-16.4%). In OECD Europe, which experienced a 12.8% reduction in its middle distillates output, the main contributors to this decrease were France (-31.8%) and Italy (-18.0%), which were under severe lockdowns and stay-at-home measures throughout the year. Declines in middle distillates output in OECD Asia Oceania (-14.9%) were mainly driven by Japan (-19.9%).

 Refinery gross output of all other oil products also declined in all OECD regions in 2020 compared to 2019 (-9.6%), again led by the OECD Americas (-11.1%). Among OECD countries, the largest contributions in the output decline for all other oil products came from the United States (-14.4%), Japan (-15.0%), and France (-27.0%).

Total imports 3 of crude oil, NGL and refinery feedstocks to individual OECD countries were 13.1% lower in 2020 than in 2019. This trend was observed across all OECD regions, and OECD Europe led this decline (-12.4%) in absolute terms. The OECD Americas experienced a 13.0% decrease, followed by OECD Asia Oceania (-14.5%).

 In 2020, Canada had the largest share of imports of crude oil, NGL and refinery feedstocks to OECD countries (+7.8%), taking the lead from Russia, which is now the second largest contributor (+7.0%). Despite providing fewer imports to OECD countries, due to lower demand and OPEC+ efforts to balance supply amidst the Covid-19 pandemic, Saudi Arabia saw its share increasing from 6.0% to 6.8% in 2020. The largest increase of imports into the OECD – in absolute terms – was seen from the United States (+4.6%), followed by Brazil (+22.8%) and Mexico (+6.0%). On the other hand, some countries experienced large declines in their exports to OECD countries, especially Russia (-16.4%), Iraq (-33.3%) and Libya (-70.9%), who eased production mainly to comply with OPEC+ cut agreements.

Total imports of total products to individual OECD countries decreased by 11.0% in 2020 compared to 2019. This decrease was once again seen across all OECD regions, and led by OECD Europe (-12.0%). In the OECD Americas, imports of total products fell by 15.4%. Pronounced falls in the imports of jet kerosene (-38.4%) across all regions – especially in OECD Europe – due to restrictions in flight activity largely contributed to this trend. Imports of motor gasoline also declined (-17.7%), led mainly by less imports from the OECD Americas (-23.5%), where reduced road mobility took place to contain the spread of Covid-19.

 While the OECD continues to be a net exporter of refined products, exports fell by 10.4% in 2020, due to a decrease in exports from OECD Europe (-11.2%), where refinery utilization rates were severely affected by the pandemic. On the other hand, total OECD exports of crude oil, NGL and refinery feedstocks increased by 1.1% in 2020, due to an increase in exports from OECD Europe (+6.0%), notably to China.

Total OECD net deliveries 4 of refined products fell by 12.7% in 2020 compared to the previous year, a trend seen across all OECD regions.

 The OECD Americas saw the largest decrease in absolute terms (-13.5%), especially due to decreases in demand of total gasoline (-14.3%), total kerosene (-40.1%), and gas/diesel oil (-9.0%). 75% of the total decline in net deliveries in the OECD Americas can be attributed to the United States.

 In OECD Asia Oceania (-10.0%), decreases in net deliveries were driven by Japan, who experienced a 10.5% decline, thanks to a noticeable drop in deliveries of jet kerosene (-47.1%). This trend was visible across all OECD regions, with jet kerosene being 47.6% lower in 2020 on a year-on-year basis, as a consequence of flight reductions in order to contain the Covid-19 virus.

 Similarly to the other OECD regions, OECD Europe experienced a drop in its net deliveries (-12.7%), mainly driven by declines in total kerosene (-51.5%) and gas/diesel oil (-8.6%). On the other hand, net deliveries of naphtha increased in 2020 (+7.9%), driven by increasing demand from the petrochemical sector. By country, France and Spain experienced the largest drops in net deliveries in absolute terms, 14.7% and 19.6% respectively.

Total OECD stocks of total oil on national territory closed at 546 million metrics tons at the end of 2020, compared to 530 million metric tons at the end of 2019. Pronounced stock builds were seen throughout the year due to reduced demand of crude oil and total products as the Covid-19 pandemic reduced the pace of industrial activities and mobility across the globe. Stock builds were observed in the OECD Americas (+5.3%) and OECD Europe (+4.6%), while the OECD Asia Oceania experienced an overall stock draw (-3.5%).

In OECD Europe, the stock build was observed for both primary and secondary oil products, with 1.6 million metric tons and 7.0 million metric tons added, respectively. The main contributors to the increases were the Netherlands, with an increase of refined products (+1.3 Mt), and Sweden, where stocks of primary oil and refined products grew by 1.0 Mt and 1.4 Mt, respectively.

 In the OECD Americas, stocks of crude oil, NGL and refinery feedstocks increased by 10.8 million metric tons, reaching record levels in June, while total products rose by 1.5 million metric tons on a year-on-year basis. The United States was mainly responsible for stock builds of crude oil, NGL and refinery feedstocks stocks, with a contribution of 8.2 million metric tons added in 2020.

In OECD Asia Oceania, primary oil stocks fell by 3.4 million metric tons, and the stocks of total products followed the same trend, although with a lower magnitude (-0.3 Mt). These changes were driven by stock movements in Japan, where a stock draw of 3.4 million metric tons of crude oil, NGL and refinery feedstocks was observed.