A Platts survey conducted by S&P Global Commodity Insights shows that oil production within the OPEC+ alliance experienced a noteworthy surge in output, primarily driven by Nigeria, Iran, and Iraq.
In the month of August, the survey findings indicate that crude oil production collectively increased by 120,000 barrels per day.
This expansion was predominantly attributed to substantial output boosts from Iran, Iraq, and Nigeria. The surge managed to outweigh the additional cutbacks imposed by both Saudi Arabia and Russia.
A part of the report from S&P Global Commodity Insights stated:
- “OPEC+ production averaged 40.52 million barrels per day in the month, with the 13 members of OPEC producing 190,000 barrels per day month on month. Output from the non-OPEC countries in the coalition contracted 70,000 barrels per day.
- “Even with the net increase, the group’s output remains well below levels earlier this summer, with Saudi Arabia implementing a voluntary 1 million b/d cut since July to help bolster market prices.
- “Saudi Arabia’s crude production was 8.95 million b/d in August, down 100,000 b/d month-on-month and at its lowest since May 2021, the survey showed.
- “The biggest non-OPEC producer in the group, Russia, lowered production by 20,000 b/d month to 9.4 million b/d in August. Russia in July had pledged a 500,000 b/d supply cut but specified that it pertains to exports, not production. It has since said it will ease back its cut to 300,000 b/d from September. “
It is important to note that several OPEC+ countries have voluntarily implemented oil production cuts. This list includes Saudi Arabia, Russia, Algeria, Gabon, Iraq, Kazakhstan, Kuwait, Oman, and the UAE. Additionally, on September 5th, Saudi Arabia and Russia jointly announced further reductions in oil production, extending them until the end of 2023.
This announcement caused Brent crude prices to surge to $90 per barrel on the same day.
Backstory
As reported by Nairametrics, these developments have led to oil prices reaching their highest levels since 2014. Saudi Arabia confirmed its commitment to maintaining voluntary production cuts of one million barrels per day until the end of 2023, while Russia declared an extension of its export cuts by 300,000 barrels per day for the same duration.
Amid these shifts, a Platts survey has brought attention to Iran, which achieved a production level of 2.95 million barrels per day, marking its highest output since November 2018.
This increase is attributed to robust exports to China.
Meanwhile, Iraq saw its production rise by 110,000 barrels per day due to increased internal consumption. Nigeria’s output also saw a boost of 60,000 barrels per day as loading resumed at the Forcados terminal following a month-long disruption caused by an underwater leak.
Despite these fluctuations, the OPEC+ alliance continues to produce well below its allocated quotas, with a collective shortfall of 1.1 million barrels per day in August. OPEC+ officials have expressed their commitment to monitoring market conditions closely and making monthly adjustments to production levels.
What you should know
Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL) recently announced that the country raised its oil production to 1.67 million barrels per day.
Note, however, that this figure is an additional of both oil and condensate production for the month of August 2023.
