Oil output from the Organization of the Petroleum Exporting Countries (OPEC) declined during March due to lower exports from key producers such as Iraq and Nigeria. This decline comes against the backdrop of ongoing voluntary supply cuts agreed upon by OPEC+ alliance members, indicating the group’s continued commitment to stabilizing oil markets amidst economic uncertainties.
According to the latest Reuters survey, OPEC pumped 26.42 million barrels per day last month, down 50,000 barrels per day from February. The survey calculated the decline based on shipping data and information from industry sources.
OPEC+ agreement
Several OPEC+ members implemented additional output cuts in January to address economic challenges and counter the rising supply from non-member countries. In March, the alliance agreed to extend these cuts until the end of June. The upcoming OPEC+ ministerial meeting on Wednesday should review market conditions and members’ output levels, with no policy changes anticipated until the group’s next full meeting on June 1.
Contributions to oil output reduction
Iraq and Nigeria were among the countries that recorded the most significant declines in oil output during March, according to the survey. Iraq committed to lower exports by 130,000 barrels per day from February to compensate for exceeding its OPEC output target. Meanwhile, Nigeria’s production and exports also declined, with exports falling sharply, according to some ship trackers.
Output dynamics
Despite efforts to cut oil output, OPEC fell short of its target cuts in March by approximately 190,000 barrels per day, primarily due to overproduction in Iraq, Nigeria, and Gabon. However, key Gulf producers such as Saudi Arabia, Kuwait, and the UAE adhered closely to their voluntary output targets, as did Algeria.
Meanwhile, Iran which is exempt from production quotas, experienced a slight decrease in output. However, it remains near a five-year high it reached in November. Despite ongoing U.S. sanctions, Iran has maintained robust output levels, contributing to OPEC’s overall supply dynamics.
The survey revealed no significant increase in output from any OPEC country last month. As for Libya, also exempt from quotas, it pumped an additional 20,000 barrels per day as the country’s output returned to normal after disruptions in February.
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