It seems the Organisation of Petroleum Exporting Countries (OPEC) and its allies are struggling to fully deliver on the oil production increase of one million barrels per day as pledged in June, after Mohammad Barkindo, its secretary general described increasing production as “a work in progress,” Reuters reported.
According to an internal OPEC document Reuters said it saw, the significant production increases in Saudi Arabia and Russia were offset by declines in Iran, Venezuela and Angola within OPEC, and production from its allies also dropped in Mexico, Kazakhstan, and Malaysia.
In June 2018, OPEC and allies had agreed to relax compliance rates with the cuts to 100 percent from the previous over-compliance, and the respective leaders of the OPEC and non-OPEC nations’ part of the deal, Saudi Arabia and Russia have been interpreting the eased compliance as adding a total of one million to the market.
According to the internal OPEC document prepared for a technical panel meeting scheduled for Friday, OPEC, excluding Nigeria, Libya, and Congo, all increased its combined production by 428,000 barrels per day in September compared to May, but Saudi Arabia put the most extra barrels on the market and boosted its production by 524,000 barrels per day in September compared to May. It was followed by Russia with 389,000 barrels per day. Iraq, Kuwait, and the United Arab (UAE) also increased their production, according to the document seen by Reuters.
However, Iran’s production slumped by 376,000 barrels per day in September from May, Venezuela’s output plunged by 189,000 barrels per day, and Angola saw its production drop by 17,000 barrels per day between May and September. Other non-OPEC allies, including Kazakhstan, Mexico, and Malaysia, which offset the Russian, increased output.
The non-OPEC partners in the deal have increased their combined production by 296,000 barrels per day since May.
However, Barkindo also reiterated OPEC’s position that “our current view is that the market is at the moment adequately supplied and well-balanced, though in a fragile state.”