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OPEC’s crude oil production slumped by 350,000 barrels per day (bpd) in January as the latest voluntary output cuts kicked in, but not all those who had pledged reductions delivered on their promises.
As OPEC’s crude oil production from all 12 members fell by 350,000 bpd to 26.342 million bpd in January, the country with the biggest contribution to the cuts was Libya, one of the three OPEC members exempted from the cuts alongside Iran and Venezuela, according to the secondary sources in OPEC’s Monthly Oil Market Report (MOMR) for February published today.
Libya’s oil production fell by 162,000 bpd in January from December, as the African producer was forced to shut down its largest oilfield, Sharara, in the first days of the New Year, temporarily taking some 300,000 bpd off the market. Force majeure on Sharara output was lifted on January 21.
Of the OPEC members who pledged voluntary cuts for the first quarter of 2024, Saudi Arabia stuck to its production goal of pumping around 9 million bpd until the end of March 2024, as part of its unilateral extra cut of 1 million bpd that began in July 2023.
Kuwait and Algeria more or less delivered on their pledges, with Kuwait cutting oil production by 109,000 bpd versus a pledge to reduce output by 135,000 bpd, and Algeria reducing production by 46,000 bpd compared to a 51,000 bpd cut pledged at the end of November.
The United Arab Emirates (UAE) has promised a cut of 163,000 bpd, but its new quota as of January 2024 is 200,000 bpd higher to 3.219 million bpd. It looks like the UAE is sticking to the cut as its output in January was 2.927 million bpd, only 31,000 bpd higher than in December, when its quota was lower.
The OPEC member that under-delivered most notably was Iraq, the second-biggest producer in the cartel. Iraq cut its oil production by 98,000 bpd to 4.194 million bpd in January, per OPEC’s secondary sources in the report. This compares with a pledged cut of 223,000 bpd.
Earlier this week, Oil Minister Hayan Abdel-Ghani said Iraq is committed to its voluntary cut in the OPEC+ agreement and would produce no more than 4 million bpd of crude.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com