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Ups and downs as OPEC+

levels broadly maintained

OPEC+ production levels were more or less maintained in
September as increases and decreases balanced each other out

COMMENTARY COMBINED oil production by OPEC+ mem- July’s oversupply came despite Abu Dhabi
bers increased by 40,000 barrels per day (bpd) National Oil Co. (ADNOC) having shut down
in September as the UAE reduced its output by the onshore Bab oilfield in late June to carry out
WHAT: around 10%, balancing out increases from oth- maintenance. The field, which had been produc-
A major output reduction ers who have struggled to stay within imposed ing more than 370,000 bpd of light, sour Mur-
by the UAE was offset by limits. ban crude, has a capacity of 420,000 bpd, but had
increases by Iran, Iraq, The Emirates’ cuts brought its oil and con- remained offline until late July.
Libya and Venezuela. densate output level to 2.43mn bpd – the lowest In June, the UAE had joined Saudi Arabia
for nearly two years, with crude down around and Kuwait in cutting extra production vol-
WHY: 310,000 bpd and condensates dropping a fur- umes, with OPEC’s three swing producers
The Emirates have been ther 170,000 bpd. The combined total repre- reducing output by 100,000 bpd, 1mn bpd and
under pressure from sents a reduction of 480,000 bpd from October 80,000 bpd respectively. Prior to the additional
OPEC+’s de-facto leader 2018, according to tracking data compiled by cuts, the emirates committed to limit production
Saudi Arabia to comply Bloomberg. to 2.44mn bpd from May until the end of July,
with production cuts. The September reductions offset roughly giving an estimated net average for the month
190,000 bpd of additional output from Iran, of 2.34mn bpd.
WHAT NEXT: Libya and Venezuela, all of which are exempt During September 1-15 production averaged
Saudi ramped up its from the OPEC+ reduction agreement owing to 2.9mn bpd, dropping by nearly 1mn bpd during
own exports amid higher their respective domestic struggles, and another September 16-30 when it averaged 1.95mn bpd.
demand from buyers in uptick in output from the group’s biggest compli- As a result of these reductions, exports to
India and South Korea. ance offender Iraq. China, India and Japan all fell.

UAE cutback Continued non-compliance
The UAE’s reductions suggest that it is edging On the flipside, despite having promised to
closer to compliance with the cuts, following the increase voluntary additional oil production cuts
assertion by Minister of Energy Suhail Al-Maz- to 400,000 bpd below its 3.8mn bpd ceiling in
rouei during the OPEC+ group’s September August and September to make up for previous
meeting that the output quota of 2.59mn bpd of non-compliance with OPEC+ cuts, data sug-
crude would not be exceeded. It had overpro- gests that Iraq has yet to make much progress
duced in both July and August. with this.

Week 40 08•October•2020 www. NEWSBASE .com P7