BAKU, Azerbaijan, September 15. OPEC+ crude oil production from all 22 member countries fell by 270,000 barrels per day (kb/d) in August, lowering the total output to 41.46 million barrels per day (mb/d), says the International Energy Agency (IEA), Trend reports.
The IEA report attributes the drop to political unrest in Libya, which significantly disrupted production, scheduled maintenance in Kazakhstan, and reduced wellhead flows from Russia.
Despite these supply cuts, Iraqi and UAE production remained stable, both exceeding their assigned quotas by a substantial margin. The IEA notes that Iraq and Kazakhstan have committed to further reducing their output to compensate for previous overproduction, aiming to balance their quotas more closely.
The IEA data shows that output from the 18 OPEC+ countries bound by quotas was 850 kb/d above the group’s implied target of 33.71 mb/d for August, even after factoring in the additional cuts pledged by Iraq and Kazakhstan. OPEC’s 12 members saw a collective decline of 70 kb/d, bringing their output to 27.37 mb/d, while the 10 non-OPEC nations saw a sharper reduction of 200 kb/d, reducing their total supply to 14.09 mb/d.
These shifts in production left OPEC+ with an effective spare capacity of 5.7 mb/d, according to the IEA, excluding Iran and Russia due to sanctions. Saudi Arabia holds the majority of this buffer, accounting for 54% of the group’s spare capacity.
As oil prices continued to decline, the IEA forecast played a key role in the decision by eight OPEC+ countries to extend their voluntary crude oil production cuts of 2.2 mb/d until the end of November 2024. These cuts are expected to be phased out gradually through December 2025. However, the IEA has emphasized that OPEC+ may pause or reverse this decision, depending on market conditions.
The OPEC+ Joint Ministerial Monitoring Committee is set to convene again on 2 October, where the group will review market dynamics and reassess the production strategy, taking into account the latest IEA forecasts.
Looking forward, the IEA's forecast for non-OPEC+ supply and global oil demand suggests a call on OPEC+ crude at an average of 41.6 mb/d in the fourth quarter of 2024. The agency also projects an average call of 41 mb/d for 2025, which is roughly 500 kb/d below August's production levels, highlighting the ongoing challenges OPEC+ faces in balancing global oil markets.