Report: OPEC+ Production Fell Short by 3.4m bpd in August

Emmanuel Addeh in Abuja

Oil producers subject to quotas raised their output by only 30,000 bpd in August and undershot their combined target by a massive 3.4 million barrels per day, according to data from Argus.

The Organisation of Petroleum Exporting Countries (OPEC) coalition was due last month to have fully unwound the production cuts of 9.7million bpd it agreed in April 2020 in response to the Covid-19 pandemic, but many members have struggled to restore supply.

 Years of underinvestment combined with the effects of sanctions against Russia and disruption and sabotage elsewhere have left a number of countries producing well below target.

The shortfall of 3.4mn bpd in August relative to the quota was wider by more than 600,000 bpd on the month, Argus estimates revealed.

OPEC member countries with quotas raised supply by only 200,000 bpd, leaving them 1.27 million bpd below their target. Non-OPEC members of the coalition underperformed to a greater extent, as output fell in Russia and Kazakhstan.

Among OPEC producers, West African countries were responsible for most of the shortfall. Disruption continues to affect loadings of Forcados, Bonny Light and Brass River in Nigeria.

Abuja had sought to implement security measures and meet its quota by the end of August, but came up to over 700,000 b/d short. A lack of investment and declining output at mature fields has also put a cap on Angolan production.

The decline in west African supply was more than offset by a sharp rebound from Libya, which brought back online fields and terminals following a period of sustained disruption.

Libya, which is exempt from targets, raised its output above 1 million bpd for the first time since March, leaving it 450,000 bpd higher on the month. This helped push total OPEC output to its highest in over two years at 29.77 million bpd, up by 670,000 bpd in July.

Mideast Gulf producers contributed to the increase. Saudi Arabia’s production edged closer to 11 million bpd, a level it has exceeded only twice since 2002 according to the Joint Organisation Data Initiative (Jodi) data.