OPEC+ alliance tightens crude output by 110,000 b/d in Nov, led by Iraq drop: Platts survey

OPEC+ crude production fell 110,000 b/d in November to 42.6 million b/d, as exports from several key producers fell month on month, the latest Platts survey by S&P Global Commodity Insights has found.

Output from OPEC's 13 members contracted by 70,000 b/d to 27.82 million b/d, mainly due to a drop in Iraqi output, the survey found, while 10 non-OPEC allies, led by Russia, pumped 40,000 b/d less.

OPEC's largest producer, Saudi Arabia, kept November production flat on the month at 9 million b/d. This is in line with its pledge to voluntarily cut 1 million b/d of crude from June levels to shore up oil prices. On Nov. 30, Saudi Arabia said it will extend this cut through the first quarter of 2024.

Iraq, OPEC's second-biggest member, had its output affected by stormy weather in the month, which prevented loadings from its southern ports, as well as a lingering dispute with the semi-autonomous Kurdistan region over payments to oil companies. The country has overproduced its quota under the OPEC+ agreement in recent months, coming under fire from other members to improve its compliance, sources have told S&P Global.

Even with its 110,000 b/d decline in production for November, it is still 70,000 b/d above its quota, making it the worst performer among the 10 OPEC countries subject to output caps.

OPEC production falls were partially offset by gains in Iran and Venezuela. The two sanctioned countries are exempt from quotas and have seen production grow significantly in recent months. Libya and non-OPEC Mexico also do not have quotas under the OPEC+ supply accord.

Iranian output has risen more than 500,000 b/d on the year to hit 3.10 million b/d in November. Venezuelan output was at a four-month high of 800,000 b/d. Production is growing at a time when Western governments are focusing sanctions pressure on Russia in response to its invasion of Ukraine.

More cuts to come

The largest non-OPEC producer in the group, Russia, saw production fall by 20,000 b/d to 9.43 million b/d. Russia pledged to voluntarily cut exports by 300,000 b/d from the May-June average up to the end of 2024. It plans to deepen this cut, which it says includes crude and oil products exports, to 500,000 b/d in the first quarter of 2024.

The second-largest non-OPEC producer, Kazakhstan, reduced crude output by 30,000 b/d to 1.53 million b/d in November, as storms affected loading at its key CPC export route.

As a whole, OPEC+ output remains significantly below the alliance's collective quotas, with a compliance rate of 115% in November. The group's production is now at a shortfall to quotas of 1.03 mil b/d, mainly due to several African countries failing to keep up with needed investments.

Nigerian output, for example, fell 30,000 b/d to 1.43 million b/d in November, well short of its 1.74 million b/d target.

Angola saw output drop 20,000 b/d to 1.13 million b/d, according to the survey, compared with its quota of 1.46 million b/d. Angola and Nigeria have been at the center of tough OPEC+ negotiations in recent months over production quotas for 2024, and they are among several countries to have had their targets slashed, much to their displeasure.

Angola's quota has been chopped to 1.11 million b/d and Nigeria's will fall to 1.5 million b/d, the alliance announced at its Nov. 30 meeting.

As well at the meeting, the group unveiled new pledges from Iraq, the UAE, Kuwait, Algeria, Kazakhstan and Oman to lower production by a further 696,000 b/d through the first quarter of 2024. Saudi Arabia said it would roll over its 1 million b/d cut, and Russia said it would reduce exports -- though not necessarily production -- by 200,000 b/d.

The announcements -- aimed to preemptively offset low seasonal crude demand and stabilize a volatile oil market battered by weak global economic indicators -- have not been enough to stop a continued selloff in prices. Platts assessed Dated Brent at $74.30/b on Dec. 7, down from $82.28/b on Nov. 29 -- the day before the meeting -- and the lowest since late June.

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

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