Financial Energy Review
The 13-member Organization of the Petroleum Exporting Countries is pumping 25.75 million barrels per day (bpd) in January, the survey found, up 160,000 bpd from December and a further increase from a three-decade low reached in June.
OPEC+, which groups OPEC and other producers led by Russia, agreed to pump more from Jan. 1 and returns to output restraint again from February amid fears of a slow demand recovery. The latest supply pact has helped oil to an 11-month high above $57 a barrel this year.
“The increase is natural with the higher production ceiling from January,” an OPEC delegate said.
In January, the biggest supply increases came from Saudi Arabia and Iraq, the group’s top two producers, reflecting their higher quotas. Iraq is still making almost all of its pledged OPEC+ cuts, having struggled to do so in the past.
OPEC+ agreed to pump an extra 500,000 bpd in January, of which OPEC’s share is about 300,000 bpd, as world demand recovers to an extent from the coronavirus crisis.
The group has delivered just over half that amount, the survey found. As a result, the OPEC producers bound by the deal made 103% of pledged cuts in January, up from 99% in December.
The third largest gain in OPEC output came from Iran, which is exempt from OPEC cuts and hoping to raise exports this year if U.S. sanctions are eased, the survey found.
Its exports have been rising since the fourth quarter although they are still a fraction of the level in 2018, when former U.S. President Donald Trump tightened sanctions.
Among the countries showing lower output, the biggest drop was in Nigeria after force majeure was declared on exports of Qua Iboe, one of Nigeria’s largest production streams. Operator Exxon said on Jan. 22 the force majeure was lifted.
Libya, also exempt from making cuts, is pumping slightly less after a brief blockade of some ports by guards. A recovery there in 2020 had helped push OPEC output higher.
The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from tanker trackers such as Petro-Logistics and Kpler, and information provided by sources at oil companies, OPEC and consultants.
