OPEC’s crude oil output decreased last month, according to a recent survey. This decline is linked to ongoing issues in Libya’s oil sector, which is grappling with civil unrest.
A Bloomberg survey released on Tuesday reported that OPEC’s crude oil production fell by 70,000 barrels per day in August, reaching 27.06 million barrels daily. The drop was largely due to a 150,000 barrels per day (bpd) reduction in Libya’s output. In contrast, production increased in Kuwait and Nigeria.
Libya’s production losses have been more severe than the reported 150,000 bpd. Recent estimates suggest that the country’s losses could range from 500,000 to 700,000 bpd, exacerbated by a new force majeure on the El Feel field. However, these steep losses have only recently emerged and did not significantly impact most of August’s production.
Saudi Arabia, the largest OPEC member, adhered to its production quota for August as anticipated. Iraq, however, failed to meet its quota and produced 320,000 bpd more than agreed upon. Iraq has promised to implement compensatory cuts to address this overproduction.
Despite these significant production setbacks in Libya, which have not yet fully impacted August’s OPEC figures, oil prices continue to fall. On Tuesday, Brent crude prices dropped by over 4%, reaching $74.06 per barrel, a decrease of 4.46% (-$3.46) on the day. Market concerns are centered around weak demand data from China and potential changes to OPEC’s production quotas starting in October. OPEC has stated it will only adjust its quotas if market conditions warrant such action.