OPEC+’s crude output fell by 300,000 b/d to 40.73 million b/d in August due to maintenance in Kazakhstan and outages in Libya. Meanwhile, overproduction issues persist as members exceeded quotas by 327,000 b/d. The group plans to address production cuts, which had been delayed to December, against a backdrop of falling oil prices.
In August, OPEC+ crude production decreased by 300,000 barrels per day (b/d) to reach 40.73 million b/d, as reported in a recent survey by S&P Global Commodity Insights. This decline was primarily attributed to maintenance activities in Kazakhstan and production outages in Libya. Despite this reduction, member countries with production quotas managed to exceed their target by 327,000 b/d, although this figure represents a decrease in overproduction from the previous month, which saw a surplus of 437,000 b/d in July. OPEC’s overall production fell by 120,000 b/d to 26.77 million b/d, with non-OPEC producers reducing output by 180,000 b/d to 13.96 million b/d. Notably, Libya experienced the most significant drop within OPEC, attributable to shutdowns linked to a political crisis, resulting in a reduction of 160,000 b/d, bringing its output to 990,000 b/d. In parallel, Kazakhstan faced maintenance-related decreases at its Tengiz field, which accounted for a 120,000 b/d drop to 1.45 million b/d. Kazakhstan and Iraq, both of which have historically produced above their quotas, have committed to rectifying their overproduction by the end of September 2025. Iraq’s output in August remained steady at 4.33 million b/d, significantly exceeding its quota of 3.93 million b/d. Russia, the leading non-OPEC member, cut its production by 50,000 b/d to 9.05 million b/d, still surpassing its quota of 8.98 million b/d, while Saudi Arabia maintained its production level at 8.99 million b/d. This continuing overproduction issue remains a concern for the group, especially amid falling oil prices instigated by high production levels outside of OPEC+ and ongoing uncertainties regarding demand. As of early September, the price of Dated Brent oil was assessed at $73.025 per barrel, marking a notable decline from over $93 per barrel in April. In response to these market conditions, OPEC and its allies have postponed their plans to gradually roll back 2.2 million b/d of voluntary production cuts by two months, now set to commence in December. These planned reductions involve eight member nations and were originally intended to start in October, contingent upon market conditions.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have been grappling with significant challenges due to fluctuating global oil prices and varying demand levels. The group, which consists of both OPEC and non-OPEC oil-producing countries, regularly evaluates its production targets to stabilize the market. Recent reports indicate that geopolitical tensions and maintenance activities have further complicated their output levels, particularly highlighted in the recent assessments of crude oil production during August 2024, revealing a drop due to individual country issues and collective overproduction.
In conclusion, August represented a notable month for OPEC+ with a decline in crude oil output primarily due to maintenance in Kazakhstan and political unrest in Libya. Despite the decrease in production, member nations continued to exceed their quotas, highlighting persistent overproduction challenges that contribute to declining oil prices. Upcoming meetings in October and December will be critical as OPEC+ seeks to address these issues and stabilize the market against a backdrop of uncertainty.
Original Source: www.spglobal.com
