OPEC+ crude production rises in December ahead of Q1 quota drops: Platts survey

OPEC+ crude production rose 130,000 b/d month on month in December to 42.73 million b/d, driven by increases in Iraq, as well as the group's biggest African producers, the latest Platts survey by S&P Global Commodity Insights found.

The higher output came despite the oil bloc's stated efforts to combat a weak market outlook, though new production cuts implemented from Jan. 1 could tighten up OPEC+ supplies.

OPEC's 13 members produced 27.98 million b/d, an increase of 160,000 b/d from November, while its 10 non-OPEC allies, led by Russia, produced 14.75 million b/d, a dip of 30,000 b/d on the month.

OPEC kingpin Saudi Arabia, which has led the alliance's crusade for production discipline, continues to hold its output at its lowest since the depths of the pandemic, pumping 8.95 million b/d in December, the survey found, while Russia kept its output flat at 9.43 million b/d. Both are just under their production quotas under the latest OPEC+ accord.

But that discipline was countered by a 60,000 b/d increase from Iraq, which is seeing growing output from the semi-autonomous Kurdistan region, as well as higher domestic crude burn for power generation. Iraq's 4.35 million b/d in December was well above its quota of 4.22 million b/d, and its habitual noncompliance has led to other members calling for tightened quota enforcement, sources have told S&P Global.

Meanwhile, Nigeria increased production by 100,000 b/d to 1.53 million b/d -- which is slightly above the West African country's new 2024 quota of 1.50 million b/d -- on higher exports and recovery from a five-day shut-in at one of TotalEnergies' 275,000 b/d projects in November caused by industrial action. As well as stepping up exports in December, an estimated 5 million barrels of crude were supplied to the upcoming Dangote Refinery near Lagos.

Production in Angola, in its final month as an OPEC member, was up 50,000 b/d to 1.18 million b/d on growing exports, according to the survey. Angola has quit OPEC as of Jan. 1 following a spat over its quota for 2024.

Elsewhere on the non-OPEC side of the alliance, Kazakhstan increased crude output to 1.56 million b/d, just above its quota of 1.55 million b/d. This was due to a recovery in exports following disruptions to loading at its main export route the Caspian Pipeline Consortium (CPC).

Deeper cuts

Saudi Arabia has pledged to maintain its voluntary 1 million b/d cut and hold its output around 9 million b/d through the first quarter of 2024.

Russia has committed to increase its voluntary export -- though not production -- cut to 500,000 b/d from the May-June 2023 average, comprising 300,000 b/d of crude curbs and 200,000 b/d of product reductions.

Several other OPEC+ countries have also agreed to make deeper cuts totaling 696,000 b/d through the first quarter to help bolster the market, including Iraq, the UAE, Kuwait, Algeria, Kazakhstan and Oman. For the UAE, however, its cut will come from a higher baseline, which it had previously negotiated to reflect its growing production capacity.

On the flip side, Nigeria and the Republic of Congo have been given reduced quotas due to their inability over the past couple of years to pump at their target levels.

OPEC+ ministers have said they stand ready to deepen the cuts, if deemed necessary, ahead of their next scheduled meeting June 1 in Vienna.

As a whole, OPEC+ output remains significantly below the alliance's collective quotas, with a compliance rate of 113.31% in November. The group's production is now at a shortfall to quotas of 907,000 b/d.

The alliance is aiming to offset low seasonal crude demand and stabilize a volatile oil market battered by weak global economic indicators with the cuts, which have kept OPEC's crude production well below pre-pandemic levels.

Total OPEC+ production from January 2024 will be impacted by Brazil joining the group, as well as Angola's exit.

The Platts survey measures wellhead production and is compiled using information from oil industry officials, traders and analysts, as well as by reviewing proprietary shipping, satellite and inventory data.

OPEC+ crude production

Unit: million b/d

Source: Platts OPEC+ survey by S&P Global Commodity Insights

Note: Quotas include voluntary extra cuts implemented by Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, Oman and Gabon.