OPEC+ January crude oil output grows, with Russia still resilient to sanctions: Platts survey

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The OPEC+ coalition increased its crude oil production by 40,000 b/d in January, the latest Platts survey by S&P Global Commodity Insights found, as Russian production remained relatively resilient to the impact of sanctions.

Russia's volumes fell just 10,000 b/d in the month to average 9.85 million b/d, according to the survey, despite an EU embargo on imports of Russian crude and an accompanying G7 price cap that went into force Dec. 5.

Elsewhere, Nigeria and Congo-Brazzaville showed healthy recoveries, offsetting declines in Saudi Arabia and neighboring Bahrain.

OPEC's 13 members pumped 29.09 million b/d in January, up 110,000 b/d from December, the survey found, while the bloc's nine allies led by Russia produced 13.66 million b/d, down 70,000 b/d.

While Russia has managed to maintain robust crude production through the ratcheting sanctions imposed by western countries over its invasion of Ukraine, analysts expect the latest measures to levy a substantive impact.

From Feb. 5, the EU began banning imports of Russian refined products in addition to crude oil, with the G7 adding a price cap to those fuels as well.

S&P Global Commodity Insights estimates that Russian supply disruptions will peak at 700,000 b/d below pre-war levels in March, as refineries are forced to cut runs and storage facilities reach capacity. That is, however, down from a December forecast of 900,000 b/d in disruptions, as the market has found ways to sustain flows of Russian crude so far.

An escalation in the conflict in Ukraine and the introduction of additional sanctions could see these estimates increase, however.

Prices for Russia's key crude grade Urals continue to trade at massive discounts. Platts, a part of S&P Global, assessed Urals at $44.82/b, compared to Dated Brent at $83.15/b on Feb. 8.

Under targets

Growing Nigerian production underpinned the increase in OPEC output in January.

Nigeria pumped 1.40 million b/d in January, the survey found, up 70,000 b/d from December and the highest since April, as key grade Agbami returned from maintenance and recently troubled flows of Forcados and Bonga saw continued rebounds.

Congo was also a big gainer in January, with a major field returning from maintenance.

OPEC's biggest producer Saudi Arabia produced 10.42 million b/d in January, down 60,000 b/d, as exports showed a sizeable fall, the survey found.

Bahrain also posted a decline, as the Gulf producer saw its output fall to 150,000 b/d from 200,000 b/d.

With several countries still struggling to raise or even maintain output due to internal disruptions or lack of investment, the OPEC+ alliance continues to massively underproduce its quotas, even with the group agreeing to slash them by 2 million b/d from November through the end of 2023.

Overall OPEC+ compliance among countries with quotas was 149.41% in January, according to S&P Global calculations, with a combined 1.79 million b/d shortfall to their production targets.

OPEC members Iran, Libya and Venezuela are exempt from quotas.

An OPEC+ monitoring committee co-chaired by Saudi Arabia and Russia announced Feb. 1 that it would recommend no change to quotas.

The monitoring committee is next due to meet April 3, followed by a full OPEC+ ministerial meeting scheduled for June 4.

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

OPEC+ production

Unit: million b/d

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

Click here to read the previous survey: OPEC+ crude oil output rises in December, as Russia manages to keep pumping