In August, OPEC+ crude output fell by 300,000 b/d to 40.73 million b/d due to maintenance in Kazakhstan and outages in Libya. Despite the decline, member countries exceeded their quotas by 327,000 b/d. Libya saw the most significant drop, while Kazakhstan also faced considerable production challenges. OPEC+ has rescheduled the easing of production cuts to December amidst fluctuating oil prices and overproduction issues.
The OPEC+ crude output witnessed a significant reduction of 300,000 barrels per day (b/d) in August, recording a total production of 40.73 million b/d. The decline was largely attributed to maintenance activities in Kazakhstan and production outages in Libya, as indicated by the Platts OPEC+ survey released by S&P Global Commodity Insights on September 9. Despite this overall decrease, the member countries exceeded their designated output quotas by 327,000 b/d in August—a decrease from the 437,000 b/d overproduction observed in July. The survey reported a fall in OPEC’s production by 120,000 b/d, bringing it down to 26.77 million b/d, while non-OPEC affiliate production decreased by 180,000 b/d, totaling 13.96 million b/d. Libya was primarily responsible for the production decline within OPEC, suffering a drop of 160,000 b/d due to political disputes that led to shutdowns and left the nation’s output at 990,000 b/d. Kazakhstan contributed the most significant decline among non-OPEC producers, with a reduction of 120,000 b/d to 1.45 million b/d as a result of maintenance at the Tengiz field. Throughout 2024, both Kazakhstan and Iraq have overproduced beyond their allocated quotas. However, they have committed to offsets by the end of September 2025. Iraq maintained its output level at 4.33 million b/d in August, surpassing its quota of 3.93 million b/d. Additionally, Russia, a leading non-OPEC figure, curtailed production by 50,000 b/d to reach 9.05 million b/d, still exceeding its quota of 8.98 million b/d. Saudi Arabia also reported stable production at 8.99 million b/d. The ongoing issue of overproduction instigates downward pressure on oil prices, with declines observed during the summer months. As of September 6, Platts assessed Dated Brent at $73.025 per barrel, a notable drop from earlier peaks of over $93 per barrel in April 2024. In response to the declining prices, OPEC+ has deferred plans to gradually reduce voluntary cuts amounting to 2.2 million b/d by two months to December; initially, they were scheduled to begin easing these restrictions in October. The pricing situation worsened since the announcement, and Dated Brent was observed at $75.225 per barrel on September 4. The Joint Ministerial Monitoring Committee overseeing the agreement is set to convene on October 2, while a comprehensive OPEC+ ministerial meeting is planned for December 1 in Vienna. The group retains the option to convene extraordinary sessions should market conditions necessitate discussions on policy adjustments. The Platts survey, which tracks wellhead production, gathers data from industry officials, traders, and analysts, alongside proprietary satellite and inventory assessments.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have faced ongoing challenges regarding production levels and pricing strategies within the global oil market. Recent survey data from Platts highlighted significant production declines primarily due to geopolitical factors and maintenance in key oil-producing nations, impacting market dynamics. The balance between adhering to production quotas and addressing market demand fluctuations remains a critical focus for OPEC+ as they navigate the complexities of global oil supply and pricing.
In summary, the August report from the Platts OPEC+ survey indicates a pressing need for member countries to align their production strategies with market demands, while addressing political and logistical challenges that hinder output. The persistent overproduction issue necessitates vigilant monitoring by OPEC+, particularly in light of fluctuating oil prices and the agreed compensation plans. Future meetings will likely focus heavily on reassessing production strategies to stabilize the market.
Original Source: www.spglobal.com
