Saudi attacks plunge OPEC production to lowest since 2011
Economy News - Baghdad
A Reuters survey found that OPEC oil production fell to its lowest level in eight years in September after attacks on two Saudi oil facilities, deepening the impact of the supply reduction agreement and US sanctions on Iran and Venezuela.
The 14 members of the Organization of Petroleum Exporting Countries (OPEC) have pumped 28.9 million barrels per day (bpd) this month, the survey showed, down 750,000 bpd from the revised August figure, the lowest monthly total since 2011.
The September 14 attacks on Saudi oil facilities halted 5.7 million barrels per day of production and lifted crude prices by 20 percent to $ 72 a barrel on September 16. But then the price fell to $ 61, approaching pre-attack levels, under the weight of the resumption of production and the concern of slowing demand.
OPEC, Russia and other oil producers, as part of the OPEC + alliance, agreed in December to reduce supply by 1.2 million barrels per day from the beginning of this year. OPEC's quota of the cut is 800 thousand barrels per day, applied by 11 members with the exception of Iran, Libya and Venezuela.
The 11 members bound by the agreement, which is to be extended until March 2020, go well beyond the promised cuts. According to the survey, compliance stood at 218 percent in September, up from 131 percent in August.
Two of the three exempted members pumped less oil than the previous month.
The biggest drop in Saudi Arabia, which received 9.05 million bpd, was down 700,000 bpd from August.
Withdrawal of stocks
The decline would have been even greater if Saudi Aramco had not withdrawn from its crude stocks to contain the decline. Sources in the survey estimated Saudi production between 8.5 and 8.6 million barrels per day.
Before this month's attack, Saudi Arabia was already cutting production more than required by an OPEC-led supply curb deal to support the market.
Production has fallen further in Venezuela, which is under US sanctions on state oil company PDVSA - aimed at toppling socialist President Nicolas Maduro - as well as a prolonged decline in production due to lack of investment and maintenance.
PDVSA this month suspended some crude blending activities and cut production due to an increase in domestic inventories, while sanctions are holding back customers and shipping companies.
The survey showed a mixed trend between Iraq and Nigeria, which have pledged to increase commitment.
Iraq has cut its exports from southern and northern outlets, the survey showed, but Nigeria has increased supplies slightly and has continued to produce above OPEC's target.
Other countries that have boosted production include Libya, which has pumped more thanks to the rise of Sharara, the country's largest oilfield, after disruptions to production in August.
There was little change in supplies from the United Arab Emirates, while there was a slight increase from Kuwait, according to the survey.
OPEC production in September is the lowest since 2011, when the civil war in Libya caused the collapse of the country's oil production, and excluding the changes of membership that have occurred since then, according to Reuters surveys.
The survey aims to monitor the market's supply and is based on outsourced shipping data, Refinitiv Icon flows and information from sources in oil companies, OPEC and consulting firms.