Saudi Arabia has been able to boost its oil output, however, shortfalls from Iran, Venezuela and Angola mean that increased OPEC output pledges may not be met. Total photo.
Trump looks for higher OPEC output to offset loss of Iran production due to sanctions
In June, OPEC and its supply cut allies agreed to boost their production to compensate for supply shortfalls due to the Trump administration’s sanctions on Iranian crude exports set to begin early next month.
While Saudi Arabia has increased its production, Reuters reports that an internal OPEC document shows output from Iran, Venezuela and Angola has dropped. Venezuelan output is down by 189,000 barrels per day (b/d) and in Angola, production fell by 17,000 b/d.
Following the June meeting of OPEC and its allies, Saudi Arabia’s Energy Minister Khalid al-Falih said OPEC and its non-cartel partners would pump an extra 1 million b/d. Reuters reports the document shows they have not yet delivered that amount.
Last week, OPEC Secretary General Mohammad Barkindo said the cartel is on course to meet the pledge, but did not offer a timeline. “It is a work in progress,” said Barkindo.
According to the internal document prepared by OPEC for a technical panel meeting last Friday, OPEC members, excluding Nigeria, Libya and Congo, increased their production by 428,000 b/d in September compared to May.
The panel, called the Joint Technical Committee, reviews producers’ compliance with their oil supply pledges.
While Saudi Arabia increased its production by 524,000 b/d in September compared to May and output from Iraq, Kuwait and the United Arab Emirates also rose, Iran cut its production by 376,000 b/d in September.
Tehran has warned that OPEC and the kingdom will be unable to make up for a total loss of Iranian production. “There is no spare capacity,” Reuters reports Iran’s OPEC governor, Hossein Kazempour Ardebili, said last month.
Non-cartel countries participating in OPEC’s supply cut agreement produced an extra 296,000 b/d since May. Russia boosted its production by 389,000 b/d, however, Kazakhstan, Mexico and Malaysia all reported drops in output.
While Nigeria, Libya and Congo are not included in the supply pact, if they were included into OPEC’s output numbers, Reuters reports the cartel’s production rose in September to 628,000 b/d.
Earlier in the year, the Trump administration said it would like to see Iran’s crude exports reduced to zero to force Tehran to enter into negotiations for a new nuclear deal.
The US has somewhat softened its stance and developing countries, including China and India, have said they may continue to import Iranian crude despite the US sanctions.
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