By Adewale Sanyaolu
Crude oil production output by the Organization of Petroleum Exporting Countries (OPEC) for April dropped by 440,000 barrels a day, a recent report has shown.
The OPEC+ crude output by members subject to cuts fell by that figure in April as Russia began implementing a fresh cut and Iraq and Kazakhstan curbed some of their overproduction.
Also, Nigeria’s production recorded a large fall in April, dropping by 100,000 bpd to 1.4 million bpd, the lowest since it recorded 1.28 million bpd in August 2023.
This left the country 100,000 bpd below its target of 1.5mn bpd. This saw the group’s production fall to 34.11mn bpd, which was 140,000 bpd above quota, Argus estimates. Still, this was a marked improvement on the 230,000 bpd overproduction that it recorded in March.
The lower production has not provided much support to oil prices, which have shed $5-8/bl in the past month.
Several members of the alliance are implementing a new set of “voluntary” cuts that came into effect in January and, for now, run to the end of June.
What OPEC+decides to do beyond this will probably be decided at a ministerial meeting in Vienna on 1 June, although the likelihood of a rollover has grown as oil prices have fallen.
The big mover last month was Russia, whose output fell by 210,000 bpd to 9.29mn bpd. The drop is related to Russia’s pledge to start phasing out an existing 500,000 b/d export cut commitment from April and replace it with a 471,000 bpd production cut by June. But the country remained 190,000 bpd above its new 9.1mn bpd target for April. And while the output fall shows Russia has made headway with its pledge to reduce production, sanctions on the country’s oil industry and Ukrainian attacks on its refineries could affect its crude output in the months ahead.
Iraq and Kazakhstan also reduced their output last month, while remaining well above target. Iraqi output fell by 40,000 bpd to 4.14mn bpd, mostly owing to lower crude use by the power sector. But this was still around 140,000 b/d above its target of 4mn b/d. Kazakhstan’s output fell by 40,000 bpd to 1.54mn bpd — the second month in a row that its output has fallen. But it was also still around 70,000 bpd above its target of 1.47mn bpd.
Iraq and Kazakhstan have each submitted plans to the OPEC+Joint Ministerial Monitoring Committee detailing how they intend to compensate for producing above target in the first four months of the year. As things stand, Iraq says it will produce 50,000 bpd below quota in May-September, 100,000 bpd below quota in October-November and 152,000 bpd below quota in December.
Kazakhstan’s compensation plan starts in May with an initial cut of 18,000 bpd below target.