OPEC, the Organization of the Petroleum Exporting Countries, experienced its most substantial monthly decline in oil output since July, according to a Reuters survey. The drop, attributed to new voluntary production cuts implemented by several member nations in alignment with the wider OPEC+ alliance and disruptions in Libyan production, signals ongoing efforts by the organization to stabilize the global oil market.
In January, OPEC members collectively pumped 26.33 million barrels per day (bpd), reflecting a reduction of 410,000 bpd compared to December. It’s worth noting that December’s total excludes Angola, which had departed from OPEC. This contraction underscores OPEC’s commitment to managing supply levels to counteract the increased output from non-OPEC nations, including Brazil and the United States.
Libya, despite not being obligated to restrain its output, witnessed the most significant decline in January due to unrest that prompted the shutdown of the Sharara oilfield—one of the nation’s major oil-producing facilities.
Some OPEC members voluntarily pledged production cuts in April 2023 and November 2023. Additionally, Saudi Arabia opted for an extra voluntary cut. However, in January, OPEC’s output remained 214,000 bpd above the implied target, primarily due to Iraq, Nigeria, and Gabon surpassing their production targets.
Iraq and Kuwait each reduced their output by 140,000 bpd as part of the new round of voluntary cuts, but Iraq’s output still exceeded its self-declared target for the first quarter by 141,000 bpd. Iran, exempt from quotas, lowered its exports, while Algeria implemented most of its voluntary reductions by cutting output by 40,000 bpd.
Saudi Arabia, the leading exporter, experienced a slight uptick in production by 40,000 bpd, maintaining proximity to its target of around 9 million bpd. The top exporter extended a voluntary 1 million bpd cut into the first quarter, following the OPEC+ deal reached in November.
Contrarily, Nigeria increased its output by 40,000 bpd, with the new Dangote refinery processing some crude, resulting in exports remaining relatively stable. However, Nigeria’s output exceeded its 2024 target by 40,000 bpd.
The Reuters survey, which aims to monitor market supply, relies on shipping data from external sources, LSEG flows data, information from flow-tracking companies like Petro-Logistics and Kpler, and insights provided by sources within oil companies, OPEC, and consultants. As OPEC continues to navigate challenges and fluctuations in the oil market, the January output data reflects ongoing efforts to balance global supply and demand dynamics.