OPEC+ crude output fell by 300,000 b/d to 40.73 million b/d in August, affected by maintenance in Kazakhstan and outages in Libya. Despite this decline, production exceeded quotas by 327,000 b/d. The group aims to address overproduction and stabilize falling oil prices, delaying plans to ease voluntary cuts to December. Future meetings are scheduled for October and December.
In August, OPEC+ crude production decreased by 300,000 barrels per day (b/d), totaling 40.73 million b/d, primarily due to maintenance activities in Kazakhstan and production outages in Libya, as reported by the Platts OPEC+ survey conducted by S&P Global Commodity Insights on September 9. Despite this overall reduction, OPEC+ member countries exceeded their production quotas by 327,000 b/d in August, albeit a decrease from the previous month’s surplus of 437,000 b/d. The persistent issue of overproduction presents challenges as the organization attempts to stabilize falling oil prices amidst fluctuating demand and high output from non-member states. OPEC’s crude output for August fell by 120,000 b/d to 26.77 million b/d, while non-OPEC allies reduced production by 180,000 b/d to 13.96 million b/d. Libya experienced the most significant drop in production within OPEC, as political turmoil led to a month-on-month decline of 160,000 b/d to 990,000 b/d. In the non-OPEC group, Kazakhstan suffered the largest cut, with maintenance at its Tengiz field leading to a 120,000 b/d decrease to 1.45 million b/d. Kazakhstan, alongside Iraq, has consistently produced above its assigned quota for 2024 and has committed to addressing its overproduction by the end of September 2025. Iraq’s output remained unchanged in August at 4.33 million b/d, significantly above its quota of 3.93 million b/d. On the other hand, Russia decreased its output by 50,000 b/d to 9.05 million b/d, while Saudi Arabia’s production remained steady at 8.99 million b/d. The ongoing overproduction has directly impacted oil prices, which have declined throughout the summer. As of September 6, Dated Brent was assessed at $73.025 per barrel, down from highs exceeding $93 per barrel earlier in the year. In response to these developments, OPEC and its allies have postponed their plans to gradually ease 2.2 million b/d of voluntary cuts, now aiming to begin this process in December instead of October, as was initially intended. This decision follows a decline in prices, with Dated Brent assessed at $75.225 on September 4. The Joint Ministerial Monitoring Committee, responsible for overseeing the agreement, is scheduled to meet again on October 2, while a full OPEC+ ministerial meeting is planned for December 1 in Vienna. The group’s ability to convene extraordinary meetings remains in place should significant market conditions arise necessitating policy discussions.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies (referred to as OPEC+) have been grappling with production levels and pricing pressures in the global oil market. Fluctuations in oil output among member nations are influenced by various factors, including maintenance, political instability, and international demand dynamics. The agreement to manage production levels through quotas was designed to stabilize oil prices that have seen considerable volatility, especially in light of changing demand patterns and competition from oil producers outside the OPEC+ framework.
In summary, OPEC+ has experienced a reduction in crude output due to maintenance activities and political disruptions. While production has fallen, member countries have still exceeded their quotas, which contributes to ongoing pricing challenges in the global oil market. The decision to delay easing of production cuts reflects the organization’s focus on stabilizing market conditions amid significant concerns over demand and external competition.
Original Source: www.spglobal.com
