Page 8 - NorthAmOil Week 31 2022

NorthAmOil POLICY NorthAmOil

OPEC members boost July

output, agree small uptick

GLOBAL MIDDLE Eastern OPEC members increased and OPEC+ signed off an increase of just
oil production in July, backing up the group’s 100,000 bpd for September despite Biden and
promise to help ease oil market constraints. other Western leaders’ best efforts to influence
Meanwhile, the OPEC+ group agreed to another a greater hike.
small rise in September targets during its meet- The largest quota expansion will be for Russia
ing this week. and Saudi, whose politically influenced quotas
According to a Bloomberg survey of Rystad will maintain parity, climbing by 26,000 bpd for
Energy, Kpler and Rapidan Energy and others, the month to 11.03mn bpd, a level neither are
OPEC added 270,000 barrels per day (bpd) of oil likely to produce at for a sustained period.
output in July, with Saudi Arabia accounting for In the case of Russia, this is largely because of
around 180,000 bpd of the increase. This took its the impact of sanctions on markets for its crude,
daily output for the month to 10.78mn bpd, the while Riyadh is keen to hold back as much of its
highest level since it briefly achieved a single-day remaining ‘spare capacity’ as possible. Majority News of the latest
record of 12.2mn bpd in April 2020 and 53,000 state-owned Saudi Aramco claims a maximum
bpd beneath its quota. sustainable capacity (MSC) of 12mn bpd, which uptick follows
News of the latest uptick follows US President rises to around 12.2mn bpd with the inclusion
Joe Biden saying that he anticipated that Riyadh of Saudi’s share of the Partitioned Neutral Zone US President Joe
would take “further steps” to ease pressure on (PNZ) that it shares with Kuwait. Iraq’s quota
supply/demand dynamics. will rise by 12,000 bpd to 4.663mn bpd. Biden saying that
Other OPEC members the UAE and Kuwait Speaking to Reuters, Raad Alkadiri, manag- he anticipated
also expanded output, with the former hitting ing director for energy, climate and sustainability
3.24mn bpd, outproducing its quota by 113,000 at Eurasia Group, said that the increase “is so lit- that Riyadh would
bpd. Abu Dhabi has long argued that its baseline tle as to be meaningless. From a physical stand-
for OPEC+ agreements should be significantly point it is a marginal blip. As a political gesture take “further
higher than its 3.168mn bpd level and state- [to Biden] it is almost insulting.”
owned Abu Dhabi National Oil Co. (ADNOC) Meanwhile, Dr. Yousef Alshammari, CEO & steps” to ease
continues to work on various projects that will head of oil research at CMarkits, said via social pressure on
raise its production capacity from the current media that the move provides “a partial offset to
4.2mn bpd to 5mn bpd by 2027. shortfalls in production targets by many produc- supply/demand
Efforts by the top producers countered reduc- ing members while maintaining spare capacity at
tions elsewhere, with Angola, Iran and Nigeria around 2.1mn bpd held mainly with Saudi Ara- dynamics.
all seeing their output fall during July. bia and UAE.” He added: “While this move was
However, as Saudi and the UAE in particu- expected a while ago, prices may take a partial
lar have consistently argued, there is little more effect due to the pre-existing impact of inflation
they can – or will – do to ease supply shortfalls, and fears of recession.”™

P8 www. NEWSBASE .com Week 31 04•August•2022