The gap between target levels and actual production of the OPEC+ group further widened in March to over 1.4 million barrels per day (bpd) as Russian crude output started to feel the sting of the sanctions and self-sanctioning of buyers and was 300,000 bpd below target, according to an OPEC+ report seen by Reuters.
Last month, the producers in the OPEC+ alliance saw their combined crude oil production lag behind the quota by 1.45 million bpd, with the compliance rate shooting up to a record 157 percent since the start of the 10-million-bpd production cut agreed upon in April 2020.
Russia’s crude oil production, in particular, averaged 300,000 bpd below target at 10.018 million bpd, per secondary sources in the report seen by Reuters.
The OPEC+ crude production in March fell further behind the target levels after February output was more than 1 million bpd below the collective quota and the compliance rate was 136 percent.
In March, Russia began to feel the pinch from the sanctions, according to the latest OPEC+ estimates.
Russia’s oil industry is already showing signs of slowing down as Western buyers shun Russian oil while Moscow struggles to replace lost sales in the West with sales in emerging Asian markets. The war Putin started in Ukraine is hitting home: storage capacity is full, infrastructure and shipping logistics prevent Russian from exporting all the oil unwanted in the West to China and India, refineries are cutting run rates as product storage is overflowing, and as a result, companies are scaling back crude production.
OPEC only raised its oil production by just 57,000 bpd in March from February, as African members’ struggles to pump more crude partially offset increases at the core OPEC members of the Middle East, OPEC’s Monthly Oil Market Report (MOMR) showed last week.
Russian oil supply is expected to fall by 1.5 million bpd in April, with shut-ins projected to accelerate to around 3 million bpd from May, the International Energy Agency (IEA) said in its monthly report last week. The IEA was ditched by OPEC at its latest meeting as a secondary source provider to assess production.
By Tsvetana Paraskova for Oilprice.com
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