OPEC, the Organization of the Petroleum Exporting Countries, will modify its monthly oil report, ceasing the publication of a calculation regarding the world’s demand for its own crude, as per two sources familiar with the situation. Instead, the report will concentrate on forecasts for demand for oil from the broader OPEC+ group.
This change mirrors the longstanding collaboration between the members of OPEC and the wider grouping on collective oil supply decisions. Historically, OPEC’s Vienna secretariat included an estimate of the demand for OPEC crude in its monthly reports, often referred to as the ‘call on OPEC’, a figure closely observed by analysts and traders as an indicator of oil market strength.
However, starting from this month, OPEC will solely provide an estimate of demand for crude from the Declaration of Cooperation (DoC) countries, the sources revealed. The DoC represents OPEC+, comprising the 12 OPEC members and 10 non-members, with Russia being the largest producer among them.
According to one of the sources, demand for crude from the wider group is now more pertinent as the DoC serves as the framework for cooperation in the oil market. Both sources chose to remain anonymous.
OPEC has not yet responded to requests for comments on the matter.
Following Angola’s departure at the end of last year, the market share of OPEC crude has declined to a multi-decade low of 27%. In contrast, OPEC+ crude holds a larger share, around 41%, according to Reuters calculations, which increases further when all types of oil are considered.
Formed in 2016 in response to the 2014-2016 oil supply glut, the DoC marked a significant collaboration between OPEC and non-OPEC countries to stabilize prices and curb output, a move unseen since 2001.
While OPEC, founded in 1960, aims at coordinating and unifying petroleum policies among member-countries, OPEC+ operates as a less formal alliance with no permanent headquarters, facilitating cooperation even for countries not willing to join OPEC formally.
Despite initial hesitations and failed attempts at cooperation, the 2016 oil price collapse brought OPEC and Russia closer together. Despite brief collapses in 2020, OPEC+ has demonstrated resilience, reforming to address the demand slump caused by the COVID-19 pandemic.
OPEC’s April report introduced a figure for demand for DoC crude alongside the traditional call on OPEC. The call on OPEC represents the amount of crude OPEC must produce to balance the market, factoring in expected non-OPEC supply and OPEC output of oil such as natural gas liquids.
The International Energy Agency (IEA) already publishes an estimate of the call on DoC, projecting demand for OPEC+ crude plus inventories at 41.8 million barrels per day in 2024, which could potentially influence how analysts perceive the oil market.
The upcoming monthly report from OPEC, set to reflect this change, is expected to be released on Tuesday.