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OPEC+ faces ambiguous production changes due to global problems

12 June 2024 22:17 (UTC+04:00)
OPEC+ faces ambiguous production changes due to global problems

By Alimat Aliyeva

According to a survey by S&P Global Commodity Insights, in May, OPEC+ saw mixed changes in production volumes among its members, Azernews reports.

Nine OPEC members exceeded their daily targets by 320,000 barrels per day, while daily crude oil production increased by 100,000 barrels (barrels per day), primarily due to increased production in Nigeria and Iraq. On the other hand, non-OPEC allies such as Russia, Kazakhstan and Mexico have cut production, bringing the alliance's total output down by 40,000 barrels per month to 41 million barrels.

These changes come at a time when non-OPEC+ countries such as the United States, Canada and Guyana are struggling to stabilize the oil market amid rising production, economic difficulties in China and internal disagreements over quota compliance.

Against this dynamic, Nigeria and Iraq have significantly increased production, despite persistent problems such as oil theft. Due to group changes and internal competitiveness, the UAE and Gabon have also slightly exceeded production. Meanwhile, geopolitical tensions have also affected production decisions.

S&P Global Commodity Insights reported that although Iraq agreed in May to compensate for excess production, it increased production by 40,000 barrels per day, 280,000 barrels above the current target, to 4.28 million barrels per day. The current oil production in Iraqi Kurdistan is estimated at 210,000 barrels per day.

Quota-free Mexico also contributed to OPEC+ production cuts, producing 50,000 barrels of oil less per day due to depletion of old fields, and damage to South Sudan's only export pipeline through Sudan resulted in the loss of tens of thousands of barrels.

The study showed that OPEC+ remains a major player in the global oil market, controlling about 40 percent of global production, while facing constant pressure on market dynamics and compliance with internal quotas. Its next key meeting is scheduled for August 1, at which additional decisions on production regulation will be discussed.
S&P Global Commodity Insights concluded: "Oil producers whose quotas have been exceeded must submit their plans to compensate for the increase in production in the first half of the year by the end of June. The OPEC+ Alliance, created in 2016 with the aim of gaining a larger market share, will hold the next meeting of the Joint Monitoring Committee on August 1, which will monitor oil production.

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