The 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, according to delegates and OPEC data Argus has seen.
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, per OPEC data Argus has seen.
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.
Russia’s output is constrained by the Western sanctions following the Russian 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 1 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. Oil majors are not investing in Nigerian supply, and many foreign firms have either sold assets or signaled 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 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 of September. This increase will be reversed in October, OPEC+ decided at a meeting earlier this month.
By Tsvetana Paraskova for Oilprice.com