OPEC+ Production Decline: Libya and Kazakhstan Hit Crude Output
OPEC+ crude output fell by 300,000 b/d to 40.73 million b/d in August, impacted by maintenance in Kazakhstan and outages in Libya. Despite the decrease, production exceeded targets by 327,000 b/d, though overproduction remains a concern. The report indicates a continuing struggle to stabilize oil prices, prompting a delaying of planned production cuts.
According to the latest Platts OPEC+ survey published by S&P Global Commodity Insights on September 9, OPEC+ crude oil production decreased by 300,000 barrels per day (b/d) to a total of 40.73 million b/d in August. This decline was primarily attributed to maintenance activities in Kazakhstan and production outages in Libya. Despite this reduction, the surveyed countries managed to produce 327,000 b/d more than their designated targets in August, although this represents a decrease from the previous month’s overproduction of 437,000 b/d. The issue of overproduction continues to be a significant challenge for the coalition as it seeks to stabilize oil prices amid fluctuating demand and increased output from non-OPEC sources. The survey indicated that OPEC’s total crude oil production fell by 120,000 b/d, reaching 26.77 million b/d, while non-OPEC partners’ production was reduced by 180,000 b/d, resulting in a total of 13.96 million b/d. Libya experienced the largest decline within OPEC, where political disputes led to a production drop of 160,000 b/d, down to 990,000 b/d for the month. Non-OPEC Kazakhstan suffered a significant cut as well due to maintenance at the Tengiz field, with a decrease of 120,000 b/d to 1.45 million b/d. Kazakhstan, together with Iraq, has consistently produced above its quota throughout 2024, and both nations have committed to addressing this excess production by the end of September 2025. Iraq maintained its output at 4.33 million b/d, significantly above its August quota of 3.93 million b/d. Leading non-OPEC producer Russia reduced its output by 50,000 b/d to 9.05 million b/d, remaining above its quota of 8.98 million b/d. Meanwhile, Saudi Arabia’s production figures remained unchanged at 8.99 million b/d. The overproduction continues to exert downward pressure on oil prices, which declined during the summer months; for instance, Platts assessed Dated Brent at $73.025 per barrel on September 6, a sharp drop from April’s peak of over $93 per barrel. In response to these market conditions, OPEC and its allies have postponed plans to begin tapering their voluntary cuts of 2.2 million b/d by an additional two months, now scheduled to begin in December 2023. The Joint Ministerial Monitoring Committee overseeing the agreement will convene on October 2, with a comprehensive OPEC+ ministerial meeting slated for December 1 in Vienna. Notably, the Platts survey incorporates wellhead production data compiled from sources including oil industry officials, traders, and analysts, along with proprietary shipping, satellite, and inventory data.
The OPEC+ group consists of oil-producing countries that have formed a coalition to manage the supply and pricing of crude oil on the global market. This coalition often faces challenges such as overproduction from member countries, political instability in oil-rich regions, and fluctuating global demand for oil. Recent months have particularly highlighted the struggles with maintaining production quotas amid an uncertain economic environment, and these factors can significantly impact global oil prices.
The recent report highlights a significant reduction in OPEC+ crude oil output, primarily due to various operational challenges within member nations such as Libya and Kazakhstan. Despite these declines, overproduction remains an ongoing issue, contributing to the volatility of oil prices. The coalition’s plan to adjust its production strategy indicates a reactive approach to current market conditions, demonstrating its commitment to stabilizing prices amidst external pressures.
Original Source: www.spglobal.com
