A large increase in Iranian oil production pushed overall OPEC oil output higher in March compared to February, the monthly Reuters survey found on Wednesday, suggesting that higher supply from members exempt from the OPEC+ cuts could spoil the cartel’s efforts to rebalance the market.
OPEC’s crude oil production increased by 180,000 barrels per day (bpd) from February to stand at 25.07 million bpd in March, according to the Reuters survey of OPEC sources, sources at oil firms, and tanker-tracking data.
The biggest contributor to the higher OPEC production this month was Iran, whose supply increased by 210,000 bpd to 2.3 million bpd, offsetting cuts from other OPEC members. Iran’s production rise was also the single-largest jump in production among OPEC members.
The second-biggest increase came from OPEC’s second-biggest producer, Iraq, which boosted production by 40,000 bpd, according to the Reuters survey.
Libya and Venezuela, the other two OPEC members exempted from the OPEC+ cuts along with Iran, also saw small rises in their respective production.
Last month, total OPEC oil production averaged 24.85 million bpd, a drop by 650,000 bpd compared to January, thanks to the extra cut from top producer and de facto leader Saudi Arabia, according to the cartel’s Monthly Oil Market Report (MOMR) for March.
In February, all three OPEC members exempted from the OPEC+ cuts had also increased their oil production.
In March, the Saudis achieved the 1-million-bpd additional cut, the Reuters survey found today.
In recent months, Iran is estimated to have started to increase its oil production and significantly raise its oil exports to China, the world’s top oil importer.
Some estimates suggest that China is set to import nearly 1 million bpd from Iran in March. Currently, Iran is masking the crude it sells to China as originating from other countries to avoid U.S. sanctions. It is also undermining the efforts of its fellow OPEC members to keep prices stronger.
By Tsvetana Paraskova for Oilprice.com
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