On August 28, Reuters released its initial estimate for OPEC‘s production in August. The report indicates that the cartel’s daily output was 26.4 million barrels, a decrease of 340,000 barrels from July. This marks the lowest production level since January, according to Barbara Lambrecht, a commodity analyst at Commerzbank.
The drop in production is primarily due to a substantial reduction in Libya’s output, which fell by 290,000 barrels per day. This decrease is attributed to both recent production losses and the earlier shutdown of the Sharara oil field. Although Libya is an OPEC member, it is not subject to production targets. However, other OPEC members with quotas are producing 220,000 barrels per day above their targets, with Iraq being a significant contributor to this surplus.
Looking ahead, OPEC’s production may decline further in September. This potential decrease could result from two main factors. First, if Libya’s oil production remains low, as it was reported to be just under 600,000 barrels per day on August 28, and if additional fields continue to face “force majeure” issues. Second, if Iraq follows through on its plans, as confirmed during the recent visit of the OPEC Secretary General, and reduces its output to below 4 million barrels per day.