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A Reuters survey shows OPEC’s oil production plunging for the month of January, registering the biggest drop in output since July last year.
The survey lists new voluntary production cuts by some cartel members along with shut-in oil in Libya due to protests earlier in the month as the causes for the drop in output.
OPEC produced 26.33 million barrels per day of oil in January, a drop of 410,000 bpd from the previous month, Reuters said, also noting that Angola’s barrels are missing as of December, when the country opted to quit the cartel.
Libya 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.
Iran was also seen to have lowered exports, according to the survey, despite the fact that Tehran has managed to keep pumping oil at what Reuters describes as a five-year high since November. Iran, sanctioned by the U.S., is exempt from OPEC’s production quotas.
Iraq, Kuwait and Algeria have also cut production in line with involuntary reductions agreed to last year. Both Iraq and Kuwait saw output trimmed by 140,000 bpd, while Algeria’s was down by 40,000 bpd. Nigeria’s output increased by 40,000 bpd, the survey said.
According to Reuters, the key takeaway here is that OPEC is seeing additional drops in its global market share, while Brazil and the United States have gained.
The survey comes less than a day after Saudi Arabia’s state-run Aramco said it had been ordered to stop work on expanding its maximum sustainable capacity to 13 million bpd, from its current 12 million bpd. In 2021, Aramco had said it was working to boost its production capacity to 13 million barrels daily, with the expansion to reach full capacity by 2027.
By Tom Kool for Oilprice.com
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Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations