RIYADH: The world needs less oil from Opec! With non-Opec crude production on the rise - expanding at the fastest rate in two decades - the call on Opec crude is getting less and less.

“Non-Opec supply growth looks on track to hit a 20-year record next year, surpassing the 1.3m barrels per day high reached in 2002,” the Paris based IEA underlined in its just released July Monthly Oil Report.

This growing, conventional and non-conventional, output outside the Opec meant that the demand for Opec crude will be about 1 million bpd lower than the volumes it is currently pumping.

As per the IEA estimates, the need for Opec crude would be just 28.85 million barrels a day in the first half of 2014, and about 29.4m barrels a day for the whole year.

Compared to the current Opec production of 30.61mbpd, this is almost 1.2mbpd less. Simple mathematics!

And interestingly the IEA in monthly oil report also hints that some of this demand could also be satisfied by drawing oil out of (strategic) inventories, adding a new dimension to the global energy debate.

Indeed with global crude dynamics undergoing a major metamorphosis, the necessity of holding huge quantities of crude in strategic reserves is increasingly being questioned — all around.

After all it comes at a cost. And a draw down from these reserves would mean less call on global crude too — one could easily deduce.

For a change, Opec too seems to be agreeing with the IEA on this count, forecasting that demand for its crude in 2014 will be below its current 30 million barrel-a-day ceiling — by about 800,000 barrels a day for the first half of the year — and about 400,000 barrels a day lower across the whole year.

The drop in demand for Opec crude will come as oil supply from countries outside the group is estimated to grow by between 1.1 million barrels a day and 1.3 million barrels a day in 2014, rising faster than global demand.

Massive new discoveries in the US and indeed elsewhere have led to a “dramatic” change in global prospects.

Good friend, Antoine Halff, the IEA’s head of oil markets, says forecasts (of non-conventional output) have had to be repeatedly revised upwards over the past two years.“In the last few years, many forecasters have had to revise their forecasts upwards continuously — sometimes the ink was not dry on the previous forecasts before they had to raise their outlooks again,” Halff added-underlining the rapid changes in global crude mix.

What could the oil producers be doing to counter these ominous clouds on the crude horizon? Opec could be forced to reduce its oil production by half a million barrels a day when it meets in December, the first cut in five years, as the latest forecasts show the US shale boom will dent demand for its crude next year, a Gulf Opec delegate told Dow Jones.

“Based on what the forecast says, we would have to cut,” said another Gulf delegate, regarded to have opposed, until recent past, any cut in production. A cut of about 500,000 barrels a day was likely to be debated at the December meeting, said another Opec delegate from the Gulf region. A consensus seems in making - finally!

Markets are soft, prompting calls for action from within Opec.

Indeed Opec is faced with a major issue — carrying strategic, long term consequences to itself, the world and the global energy balance and stability. Also some are questioning the very existence of Opec as a group. Few are inclined to write its obituary too. This has happened earlier too. But Opec had succeeded in bouncing back — a few times in recent history. The struggle to dominate the global energy markets is on. Let’s wait before reaching a conclusion. The outcome won’t be too long!