Release Date: January 9, 2024

This article reviews the performance of our crude oil price forecast in 2023. Another supplement to the January STEO presents our forecast for crude oil prices and global petroleum markets in 2024 and 2025.

STEO Between the Lines: A look back at our forecast for global crude oil prices in 2023

The daily spot price of Brent crude oil averaged $82 per barrel (b) in 2023, in line with the $83/b expectation for the year we laid out in our January 2023 Short-Term Energy Outlook (STEO). Although those prices were close to the 2023 forecast on an annual basis, the Brent price was generally lower than our January forecast during the first half of the year and greater than our January forecast during the second half of the year.

With the January 2023 STEO forecast, we published a Between the Lines article that identified several sources of uncertainty affecting our crude oil price forecast:

• Russia's oil production and ability to export petroleum products
• Several other countries' ability to increase oil production
• China's loosening of pandemic-related restrictions

In this article, we look back at those sources of uncertainty and other factors that affected global liquid fuels markets by comparing values published in our January 2024 STEO with our January 2023 STEO forecast. Other than data for crude oil prices, the 2023 monthly values discussed in this article are estimates that remain subject to revision. Depending on the country or region, data for international energy production and consumption may not be available for more than a year after the month has passed.

Russia's oil production and ability to export petroleum products

Russia's liquid fuels output was one of the largest sources of uncertainty we identified in early 2023. At the time, we expected international sanctions would limit Russia's ability to export petroleum and other liquids and therefore also limit Russia's production. However, Russia's liquid fuels production has been higher than we expected.

We now estimate that Russia's liquid fuels production declined by only 200,000 barrels per day (b/d) in 2023, down 2% from 2022. That contrasts with our January 2023 forecast in which we anticipated a decline of 1.4 million b/d, 13% less than in 2022. In November 2023, we outlined how Russia's trade flows shifted to different export markets, which has allowed Russia's production to remain higher than we previously expected.

Several other countries' ability to increase oil production

In our January 2023 forecast, U.S. growth in production of petroleum and other liquids remained uncertain because of relatively low capital investment from crude oil producers. At the time, we had forecast annual U.S. liquid fuels production to increase by 1.0 million b/d (5%) in 2023. We now estimate that annual production grew by 1.6 million b/d, an 8% increase from 2022.

Production increases from the United States and several other countries such as Brazil, Guyana, and Norway were partially offset by unexpected production cuts by OPEC members, especially Saudi Arabia. Our estimate for 2023 OPEC production is now 0.9 million b/d less than we had initially forecast in January 2023. The OPEC values in this article do not include Angola, which left OPEC in January 2024.

In January 2023, we forecast global supply of petroleum and other liquids to increase by 1.1 million b/d. We now estimate that global liquid fuels supply increased by 1.7 million b/d and reached 101.7 million b/d in 2023.

China's loosening of pandemic-related restrictions

In early 2023, many pandemic-related restrictions had just been lifted in China, and how quickly economic activity would approach pre-pandemic levels remained, at the time, unclear. Since then, China's economy has grown faster than our initial expectations, and its petroleum consumption has exceeded our expectations.

Greater-than-expected economic growth and petroleum consumption in China were consistent with the global trend. In January 2023, we assumed that global GDP growth would be 1.8% in 2023 based on short-term international economic expectations from Oxford Economics. We now estimate the global economy grew by 3.1% in 2023.

Similarly, our forecast for growth in global consumption of petroleum and other liquids increased. We had forecast that consumption would grow by 1.0 million b/d in our January 2023 forecast and now estimate that consumption grew by 1.9 million b/d, reaching 101.1 million b/d in 2023.