Although the new OPEC+ agreement goes into effect on May 1, OPEC's fourth-largest producer, Kuwait, has already started to reduce crude oil supply to international markets "sensing a responsibility responding to market conditions," Kuwait's Oil Minister Khaled Al-Fadhel told the official state Kuwait News Agency (KUNA) on Thursday.
OPEC and its non-OPEC partners led by Russia agreed earlier this month to reduce their combined oil production by 9.7 million bpd in May and June, in response to the crash in global oil demand in the pandemic. Analysts, however, think that those cuts would be 'too little too late' to support the market, considering that the current demand loss stands at around 30 million bpd-three times the cuts promised by OPEC.
Kuwait is OPEC's fourth-largest producer behind Saudi Arabia, Iraq, and the United Arab Emirates (UEA), and it pumped 2.84 million bpd of oil in March, up by 170,000 bpd from February, according to OPEC's secondary sources in its latest Monthly Oil Market Report (MOMR). Kuwait, like its allies in the Persian Gulf, the UAE, and Saudi Arabia, opened the taps in March after early in the month Russia refused to back a 1.5-million-bpd collective OPEC+ cut to address the lower demand.
But after the OPEC+ group managed to hammer out a new deal earlier in April, Kuwait now says that it had started to reduce supply to the market, and called for "maintaining spirit of team work to face forthcoming challenges emanating from the coronavirus impact on the global oil demand."
While Kuwait signals reductions in supply ahead of schedule, Saudi Arabia declined to comment for Bloomberg if it would cut supply before May, while UAE energy officials were not immediately available for comments. Iraq, however, a regular cheater in OPEC+ agreements, is not planning on reducing production before the start of the new deal, Alaa Al-Yasiri, acting director general of the state-run Oil Marketing Co, told Bloomberg.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More