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World | Sep 21, 2022

OPEC+ 3.6 million bpd below oil production target

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A model of 3D printed oil barrels is seen in front of displayed stock graph going down in this illustration taken, December 1, 2021. (Photo: REUTERS/Dado Ruvic/Illustration/File)

The Organization of Petroleum Exporting Countries and its allies (OPEC+) group continues to vastly underperform its collective oil production target with the gap between the quota and actual output widening to a massive 3.58 million barrels per day (bpd) in August.

Delegates and OPEC data from Argus Media is reporting that the 10 OPEC members bound by the pact saw their collective crude oil production hit 1.399 million bpd below the quota, while the non-OPEC producers in the deal were more than 2 million bpd behind quota at 2.185 million bpd. In July, OPEC+ was already 2.9 million bpd below its target.

In August, the two biggest laggards in production quotas were Russia of the non-OPEC group and Nigeria of OPEC, the data showed. Russia’s oil production was 1.25 million bpd below its target, while Nigeria was 700,000 bpd behind its quota.

Crude exports out of Nigeria plunge

Russia’s output is constrained by the Western sanctions following the invasion of Ukraine, while Nigeria has had troubles for years with a lack of investment and oil theft. Crude oil exports out of Nigeria plunged to below one million bpd in August, their lowest level on record, oil export analytics firm Petro-Logistics said earlier this month.

Persistent underinvestment in the Nigerian oil industry and the perennial problem of oil theft from pipelines have plagued the sector in recent years.

A vertical gas flaring furnace is seen in Ughelli, Delta State, Nigeria September 16, 2020. (Photo: REUTERS/Afolabi Sotunde/File)

Oil majors are no longer investing in Nigerian supply, with many foreign firms having either sold assets or signalling they would pursue divestments in Nigeria’s oil industry.

OPEC+ was widely expected to continue to underperform by a lot compared to its production targets for July and August. This has come about after the group decided to accelerate the rollback of the cuts and have them completely unwound by the end of August. The underperformance in September will be even higher because the group lifted its collective target by 100,000 bpd for the month. This increase will be reversed in October, OPEC+ decided at a meeting earlier this month.

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