• Saturday, April 20, 2024
businessday logo

BusinessDay

OPEC December oil surge sparks concerns over production cut commitments

In recent events, the Organization of the Petroleum Exporting Countries (OPEC) recorded a notable surge in crude oil production, reaching 27.88 million barrels per day in December.

This development, revealed by a Reuters survey, indicates an average daily increase of 70,000 barrels within OPEC, with notable contributions from Iraq and Angola. Nigeria also saw a production increase. However, Saudi Arabia recorded a reduction in production.

The OPEC and Alliance monthly oil market report that will corroborate this survey is scheduled for publication on Wednesday, January 17.

Despite this boost, the organization remains 1 million barrels daily below the December 2022 peak. In collaboration with its partners led by Russia, OPEC committed to reducing combined crude oil production to 2.2 million barrels daily, with Saudi Arabia taking the lead in the cuts.

The unexpected December surge raises concerns about OPEC’s ability to meet the agreed-upon targets for January.

To address compliance, OPEC+ has scheduled a Joint Ministerial Monitoring Committee (JMMC) meeting in early February. Notably, Angola, having withdrawn from OPEC, won’t be subject to JMMC scrutiny.

The move was attributed to a misalignment of values and interests. Angola’s revised production quota stands at 1.11 million barrels per day, down from the prior agreement of 1.28 million barrels per day for the current year.

The survey, drawing from diverse sources, including shipping data, Refinitiv Eikon data, and insights from Petro-Logistics, Kpler, oil companies, OPEC, and consultants, provides a comprehensive view of the evolving landscape in global oil production.