G3 SitRep - OPEC+ Over Quota, Producers Make Cuts

The latest data from the International Energy Agency (IEA) reveals that OPEC+ countries surpassed their oil production plan for January by 550,000 barrels per day (bpd), despite some members implementing voluntary cuts. In total, OPEC+ nations produced 34.87 million bpd, exceeding the planned extraction of 34.32 million bpd. This excess production comes despite efforts by some member countries to adhere to voluntary reductions. Notably, the UAE, Iraq, and Kazakhstan were among the countries that exceeded their production quotas, with the UAE producing 300,000 bpd above its required quota, Iraq surpassing its quota by 230,000 bpd, and Kazakhstan exceeding its quota by 150,000 bpd.

In response to the overproduction, Iraq and Kazakhstan have announced plans to compensate for the excess output over the next four months. These developments come after the implementation of voluntary cuts, with Saudi Arabia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman committing to reduce production as part of an agreement. Russia, a key player in the oil market, also reduced its oil output by 40,000 bpd to 9.44 million bpd in January, in line with its commitment to intensify restrictions on oil exports by 200,000 bpd.

Looking ahead, the IEA estimates that Russia’s overall oil output will decline by 120,000 bpd year-on-year to 10.84 million bpd in 2024. These figures indicate a concerted effort by OPEC+ nations to stabilize global oil markets amid fluctuating demand and supply dynamics. However, the challenge remains in ensuring strict adherence to production quotas and voluntary cuts to prevent oversupply and maintain price stability in the global oil market.