Page 10 - MEOG Week 36 2022

MEOG POLICY & SECURITY MEOG

OPEC+ reverses recent addition

with first cut in 18 months

OPEC+ THE OPEC+ group of oil producers this week The reduction swiftly dispelled any return of
met to decide their next production quotas, questions about the OPEC+ group’s relevance
electing to row back on last month’s increase in and while the market’s thirst for oil has tested
the wake of falling prices and demand concerns. the top end of production, a willingness to cut
As expected, the 100,000 barrel per day (bpd) output is likely to ensure the producers keep
uptick added in August was removed again on crude prices within levels they deem acceptable
September 6, with the group saying it would – reportedly a minimum of $90 per barrel.
meet again on October 5. In a press release pub- Speaking to Forbes Middle East, Dr. Yousef
lished by OPEC, the group noted “the adverse Alshammari, CEO & Head of Oil Research at
impact of volatility and the decline in liquid- CMarkits, said: “It is expected that the cut will
ity on the current oil market and the need to lead to around 43,000 bpd of actual production
support the market’s stability and its efficient being cut from Saudi Arabia, UAE and Kuwait,
functioning”. while other producers are already falling behind
It reiterated its “readiness to make imme- their quotas. The gap between OPEC+ quota and
diate adjustments to production in different actual production is already close to 3mn bpd.”
forms, if needed”. The caution comes amid con- However, he added that the “decision reflects
cerns about global recession and the apparently that OPEC+ is still in control and is ready to take
increasing likelihood of Iranian crude returned further measures to balance the markets espe-
to the market. cially under fears of recession and weakening
The quota cut is the group’s first for 18 months demand in the months ahead.”
and follows months of over-compliance with It comes as yet another blow to consumer
quotas – underproduction – as members strug- nations that see lower oil prices – and higher sup-
gle to add to output as they max out capacity and plies – as a means of driving economic growth.
Targets (mbpd)
Russian levels are depressed by domestic eco- None would be more disappointed than US Increase (mbpd)
September 2022 October 2022
nomic issues and other sanctions-related issues. President Joe Biden, who the White House said
OPEC
Algeria
As a result, the impact on markets has been was “determined to continue to take every step 1.055 -0.002
1.057
Angola
muted, but the message behind the move may be necessary to shore up energy supplies and lower 1.525 -0.004
1.529
indicative of what is to come. energy prices.” In recent weeks, there have been 0.325 0
0.325
Congo (Brazzaville)
While Saudi Arabia has been able to increase reports suggesting that this could include an eas- 0.127 0
Equatorial Guinea
0.127
output – to around 10.9mn bpd in July and ing of restrictions on the purchase of Venezuelan 0.186 -0.001
0.187
Gabon
Iran
Exempt
August from 10.7mn bpd in June – there are con- and Iranian crude, while talks between interna- Exempt
4.663
Iraq
cerns about its ability and desire to raise produc- tional governments and Tehran on the renewal 4.651 -0.012
2.818
Kuwait
tion towards majority state-owned NOC Saudi of the Joint Comprehensive Plan of Action 2.811 -0.007
Exempt
Libya
Exempt
Aramco’s self-proclaimed 12mn bpd maximum (JCPOA) appear to be progressing towards a
Nigeria
sustainable capacity (MSC). conclusion.™ 1.83 1.826 -0.004
Saudi Arabia 11.03 11.004 -0.026
UAE 3.186 3.179 -0.007
Venezuela Exempt Exempt
Targets (mbpd) Total 26.752 26.689 -0.063
September 2022 October 2022 Increase (mbpd)
OPEC Non-OPEC
Algeria 1.057 1.055 -0.002 Azerbaijan 0.718 0.717 -0.001
Angola 1.529 1.525 -0.004 Bahrain 0.205 0.205 0
Congo (Brazzaville) 0.325 0.325 0 Brunei 0.102 0.102 0
Equatorial Guinea 0.127 0.127 0 Kazakhstan 1.71 1.706 -0.004
Gabon 0.187 0.186 -0.001 Malaysia 0.595 0.594 -0.001
Iran Exempt Exempt Mexico 1.753 1.753 0
Iraq 4.663 4.651 -0.012 Oman 0.883 0.881 -0.002
Kuwait 2.818 2.811 -0.007 Russia 11.03 11.004 -0.026
Libya Exempt Exempt Sudan 0.075 0.075 0
Nigeria 1.83 1.826 -0.004 South Sudan 0.13 0.13 0
Saudi Arabia 11.03 11.004 -0.026 Total 17.201 17.167 -0.034
UAE 3.186 3.179 -0.007 OPEC+ 43.953 43.856 -0.097
Venezuela Exempt Exempt
Total 26.752 26.689 -0.063
Non-OPEC
Azerbaijan 0.718 0.717 -0.001
Bahrain 0.205 0.205 0
Brunei 0.102 0.102 0
1.71
Kazakhstan
-0.004
P10 0.595 1.706 www. NEWSBASE .com Week 36 07•September•2022
Malaysia
-0.001
0.594
Mexico 1.753 1.753 0
Oman 0.883 0.881 -0.002
Russia 11.03 11.004 -0.026
Sudan 0.075 0.075 0
South Sudan 0.13 0.13 0
Total 17.201 17.167 -0.034
OPEC+ 43.953 43.856 -0.097