In a recent survey conducted by Reuters, it has been revealed that OPEC (Organization of the Petroleum Exporting Countries) witnessed a substantial decline in oil production for the month of January, marking the most significant drop since July of the previous year.
The survey attributes the notable reduction in output to new voluntary production cuts implemented by certain OPEC members and disruptions in Libya due to protests earlier in the month. OPEC’s oil production for January stood at 26.33 million barrels per day, reflecting a decrease of 410,000 barrels per day compared to the previous month. Reuters also noted the absence of Angola’s barrels since December, following the country’s decision to exit the cartel.
Libya, grappling with internal issues, had to temporarily close its largest oilfield, Sharara, in the early days of the New Year, resulting in a temporary removal of approximately 300,000 barrels per day from the market. The force majeure on Sharara output was lifted on January 21.
Despite ongoing sanctions imposed by the U.S., Iran has reportedly lowered its oil exports, a surprising move considering Tehran has sustained oil pumping at a five-year high since November. It’s worth noting that Iran is exempt from OPEC’s production quotas.
Further contributing to the overall decline, Iraq, Kuwait, and Algeria have voluntarily curtailed production in adherence to the involuntary reductions agreed upon last year. Iraq and Kuwait witnessed a reduction of 140,000 barrels per day each, while Algeria’s output saw a decrease of 40,000 barrels per day. On the contrary, Nigeria experienced an increase of 40,000 barrels per day in output, according to the survey.
Reuters highlights a key observation from the survey – OPEC is witnessing additional drops in its global market share, while Brazil and the United States are gaining ground.
The survey findings emerge shortly after Saudi Arabia’s state-run Aramco announced a halt in the expansion of its maximum sustainable capacity to 13 million barrels per day. This decision comes after Aramco had previously communicated its plans to boost production capacity to 13 million barrels daily, with the expansion targeted to reach full capacity by 2027.