OPEC’s crude oil production rose by 120,000 barrels per day (bpd) in September from August – the second monthly increase in a row – as higher output in Iran and Nigeria offset the Saudi cuts, the monthly Reuters survey showed on Monday.
All OPEC members produced 27.73 million bpd in September, as Nigeria and Iran boosted production the most, according to the survey based on vessel-tracking data, consultants, and sources at OPEC and oil firms.
Nigeria, which has been lagging behind its quota in the OPEC+ deal, increased its oil production by 110,000 bpd in the absence of major disruptions to exports, the survey found.
Iran, exempted from the OPEC+ cuts due to the U.S. sanctions, saw the second-largest increase in oil output within OPEC and is estimated to have pumped 3.15 million bpd in September—the highest since 2018.
In the middle of August, a senior Iranian government official was quoted as saying that crude oil exports from Iran had gone up to 1.4 million bpd.
Separately, the head of the National Iranian Oil Company has said there were plans to boost oil production to 3.5 million bpd by the end of September.
The rises in Nigerian and Iranian production offset a large part of the cuts from Saudi Arabia, which is estimated to have kept its oil output in line with the pledge to pump around 9 million bpd in September, the Reuters survey found.
September was the second consecutive month in which OPEC’s crude oil production increased, after a 113,000 bpd rise to 27.45 million bpd in August.
Official OPEC figures for the September production are due out on October 12 in the Monthly Oil Market Report.
This week, on October 4, the Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ group is meeting to take stock of the oil market developments in recent weeks.
Saudi Arabia has extended its extra 1 million bpd cut until the end of the year, but some analysts have said that the Kingdom could begin easing the cut sooner than oil market participants believe as the world’s top crude oil exporter wouldn’t risk demand destruction through too high prices.
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By Michael Kern for Oilprice.com
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Moreover, non-OPEC+ producers like the United States, Brazil Canada and Norway aren’t in a position to lift their production enough to offset any shortages. US shale oil is a spent force while Brazil is struggling to satisfy domestic demand.
As for the Saudi cut, I will call it the cut that never was since Saudi Arabia is probably unable to supply the 1.0 million barrels a day (mbd) in exports that it was supposed to have cut without depleting its available oil inventory.
Why else would Saudi Arabia be sacrificing lucrative crude oil exports at prices far higher than its breakeven price of $83-$85 a barrel and causing its budget to go to deficit when with current prices it would be having a surplus?
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert