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Last month, OPEC reduced oil production as the group and its allies made fresh efforts to support prices and prevent a global surplus.
According to a Bloomberg survey, OPEC decreased its daily oil production by 490,000 barrels last month to reach 26.57 million bpd.
About half of the reduction came from Iraq and Kuwait. However, OPEC’s implementation of its new production cuts was not in line with the specified target set by the alliance.
Notably, approximately a quarter of the decline was due to unrest in Libya, which was not part of the planned cuts. Despite this, total production remains several hundred thousand barrels per day above the collective standard, with Iraq and the UAE producing more than their allocated shares.
OPEC and its allies, led by KSA, have pledged additional production cuts this quarter – in addition to last year’s cuts – as global oil demand growth slows and rival supplies, led by the US, continue to rise.
On the other hand, oil markets remain fragile, with prices hovering near $80 per barrel in London even as conflicts intensify in the Middle East and shipping in the Red Sea comes under attack. Prices are lower than they were when Hamas launched its attack on Israel last Oct. 7th.
The survey indicates that Kuwait and Algeria have implemented the required cuts, reducing production by 110,000 bpd and 50,000 bpd, respectively.
Moreover, Iraq made significant progress by reducing its production by 130,000 bpd to pump around 4.2 million bpd. This resulted in the country’s production exceeding the agreed-upon ceiling by about 200,000 bpd, despite facing significant financial pressures to boost revenues.
Libya’s production decreased by 120,000 bpd to approximately one million bpd after the closure of its largest oil field due to protests that lasted several weeks.
Notably, the implementation of the broader new cuts by the OPEC+ alliance, which includes countries such as Russia and Kazakhstan, was somewhat vague.
