OPEC+ members reduced production in August

By Rhod Mackenzie

The OPEC+ countries participating in the deal reduced their production by 20 thousand barrels per day in August compared to July, to 35.99 million barrels per day, the overhang of quotas amounted to 3.59 million barrels per day, according to the monthly report of the International Energy Agency (IEA).

According to the figures, the 19 OPEC member countries that have quotas produced 35.99 million barrels per day in August. In July, their production was 36.01 million barrels, so it fell by 20 thousand barrels per day over the month. At the same time, the target production level within the quotas is 39.57 million, so the difference between the quota and actual production was 3.59 million barrels per day.

"In August, oil production by all 23 OPEC+ members rose from a near two-year low to 42.75 million barrels per day, 130 thousand barrels higher than the previous month, as increased supply from Iran, Nigeria, Iraq and Bahrain more than offset the declines in production by Saudi Arabia and Kazakhstan," the report said.
In August, production in OPEC alone rose by 90 thousand barrels per day to 27.96 million, and in non-OPEC by 40 thousand barrels per day to 14.79 million.

OPEC+ cut oil production by 9.7 million barrels per day in May 2020 due to a drop in oil demand caused by the pandemic. Since August 2022, the alliance has been in the final phase of phasing out these cuts, but since November it has been reducing production again - by 2 million barrels per day from the maximum possible level in August. This decision is in place until the end of 2023. Following a meeting on 4 June, OPEC+ announced the extension of its agreement until 2024 and a reduction in the target level of oil production by 1.4 million barrels from next year.

In addition, additional production cuts by individual countries that began in May are continuing and even being postponed until next year, including Russia and Saudi Arabia - 500,000 barrels per day, and Riyadh announced an increase in its cut by 1 million barrels per day for July and then extended it until the end of the year. Russia, for its part, voluntarily reduced oil exports by 500,000 barrels per day in August and will continue to do so in September-December, but the volume of the reduction will be 300,000 barrels.

Earlier, OPEC countries and the OPEC+ alliance excluded IEA data from their calculations and replaced it with information from analysts Wood Mackenzie and Rystad Energy. Deputy Prime Minister of the Russian Federation Alexander Novak explained that this was due to the bias of the agency, whose certain attitudes can be seen in statements in their analysis of the energy market.