The photo is sourced from agenzianova.com
Under the Energy Institute’s classification, crude oil production includes the production of crude oil plus oil sands and gas condensate, which require further processing after being extracted from the well. Meanwhile, natural gas liquids include ethane and liquefied hydrocarbon gases (propane, butane, propane-butane), which are extracted during natural gas production.
Crude oil is the primary feedstock for the production of petroleum products used in the transport sector: gasoline, diesel fuel, gas oil and jet fuel. Light hydrocarbons – ethane, propane, butane, propane-butane – are used for cooking and as a vehicle fuel, but they are mainly used for the production of polymers, including polyethylene and polypropylene. After further processing, they are used in construction, automaking, agriculture, the food industry and a number of other sectors.
Industry specifics largely explain the difference in the dynamics of crude oil and light hydrocarbon production. According to the Energy Institute, global oil consumption for the production of gasoline, diesel fuel, gas oil and jet fuel rose by 260,000 bpd in the period from 2019 to 2023, while demand for ethane and liquefied petroleum gases (LPG) increased by 880,000 bpd over the same period. The slowdown in transport demand due to the COVID-19 pandemic and the spread of electric vehicles occurred simultaneously with the large-scale launch of new petrochemical facilities in China, one of the largest suppliers of polymers to developing countries. According to the consulting company JLC, the annual capacity of facilities for the production of basic polymers in China reached 7.3 million tons in the period from 2020 to 2023, more than doubling the total for 2010–2019.
Production dynamics are also affected by the OPEC+ deal. For instance, oil production in Russia and Saudi Arabia was below the 2019 level by almost 1.2 million bpd in 2023, whereas the production of natural gas liquids in the United States increased by 1.6 million bpd over the same period.
