In August, OPEC+ crude oil output decreased by 300,000 b/d to 40.73 million b/d due to production outages in Libya and maintenance in Kazakhstan. Nevertheless, production from quota-allocated countries still exceeded targets by 327,000 b/d. The alliance faces ongoing overproduction issues that have influenced oil prices, leading to postponed rollbacks of voluntary production cuts. Key upcoming meetings will assess the group’s future strategies.
In August, OPEC+ experienced a decline in crude oil output of 300,000 barrels per day (b/d), bringing total production down to 40.73 million b/d, according to the latest Platts OPEC+ survey released by S&P Global Commodity Insights on September 9. This reduction was primarily attributed to maintenance activities in Kazakhstan and production outages in Libya. Despite the drop in total output, the member countries with production quotas still exceeded their targets by 327,000 b/d, although this figure represents a decrease from the 437,000 b/d overproduction noted in July. The survey indicated that OPEC’s production slipped by 120,000 b/d to 26.77 million b/d, while its non-OPEC partners reduced output by 180,000 b/d to 13.96 million b/d. Libya was notably impacted by shutdowns due to political conflicts, resulting in a month-over-month output decline of 160,000 b/d, bringing its August production down to 990,000 b/d. Kazakhstan faced the largest cut among non-OPEC producers, with a 120,000 b/d reduction to 1.45 million b/d due to maintenance at the Tengiz field. Looking at individual producers, Iraq’s output remained stable in August at 4.33 million b/d, considerably exceeding its quota of 3.93 million b/d. Russia, as the leading non-OPEC producer, reduced its output by 50,000 b/d to 9.05 million b/d, still above its target of 8.98 million b/d. Saudi Arabia maintained its production at 8.99 million b/d, aligned with its quota. The continued overproduction within the alliance has been a primary concern, contributing to a decline in oil prices amid fluctuating demand and high production levels from non-members. On September 6, the Platts assessment of Dated Brent hit $73.025 per barrel, significantly reduced from highs of over $93 per barrel earlier in the year. OPEC+ decided to postpone the gradual rollbacks of 2.2 million b/d of voluntary production cuts, originally slated for October, until December 2023, responding to market conditions. The Joint Ministerial Monitoring Committee is set to meet on October 2, with a complete OPEC+ ministerial meeting scheduled for December 1 in Vienna, where further discussions on production policies may take place.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, play a significant role in regulating oil prices through their production levels. The coalition has faced challenges in maintaining stability in oil prices amidst fluctuating demand and increasing output from rival oil producers outside the alliance. Maintenance activities and geopolitical issues often impact the production levels within member countries, leading to adjustments in quotas and production strategies. The coordination among OPEC+ members is crucial for balancing the global oil market, especially during times of price volatility. This context shapes the current production and market dynamics reported in the Platts OPEC+ survey, highlighting the group’s operational challenges and strategic responses to market changes.
In summary, OPEC+ has recorded a significant reduction in crude oil output for August, driven by maintenance and political disruptions in key member states. Despite a temporary decline, certain member countries have exceeded their production quotas, prompting ongoing challenges in managing overproduction and stabilizing oil prices. The upcoming meetings of the Joint Ministerial Monitoring Committee and a full OPEC+ ministerial gathering will be crucial for determining future production strategies in response to market demands.
Original Source: www.spglobal.com
