Although the OPEC+ alliance is currently ramping up its collective crude oil production slightly above what they had agreed on, not all members of the group can quickly raise their output, Russian President Vladimir Putin said at an event on Thursday.
“Currently, the OPEC+ countries are increasing production volumes, even slightly more than they agreed to do, but not everyone can do it,” Putin said at an economic discussion on Thursday, as carried by Russian news agency TASS.
“Not all oil-producing countries are able to quickly increase oil production. This is a long-term process, a long cycle,” the Russian president added.
The OPEC+ group, in which Russia is the key non-OPEC partner, decided earlier this month to proceed with increasing the coalition’s overall oil production by 400,000 bpd—the minimum the market was expecting.
However, for several months now, some OPEC+ members—including OPEC’s Angola and Nigeria and non-OPEC’s Azerbaijan—have struggled to raise their oil production to the highest possible level allowed under the deal. The struggles have come from technical issues, a lack of investments, and lower exploration efforts in recent years.
OPEC+ saw its overall compliance with the collective oil production cuts at 115 percent in September, a delegate told Argus on Monday. The September compliance rate was down from the 116-percent compliance in August, but still higher than the market had hoped, with some members of the alliance failing to ramp up production in line with their quotas.
The high compliance rate despite the monthly easing of the cuts by 400,000 bpd suggests that not all members of the pact are capable of raising supply as quickly as their quotas under the deal stipulate.
According to Bloomberg’s estimates, if all members of the OPEC+ alliance stuck to their respective production ceilings in September, the overall production of the group would have been 747,000 bpd higher than what it was.
By Tsvetana Paraskova for Oilprice.com
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