Argus Media : Opec+ crude output 800,000 b/d short of Jan target

Opec+ crude production increased again last month but the group fell further short of its target amid dwindling spare capacity.

Countries participating in the Opec+ deal raised output by 260,000 b/d to 37.94mn b/d in January, 800,000 below target for the month, according to Argus' survey. The group is finding it increasingly difficult to keep pace with its monthly 400,000 b/d hike in quotas as spare capacity tightens. Argus estimates that the coalition's spare capacity could drop as low as 3.8mn b/d by the end of March.

Opec members accounted for much of last month's increase, with Mideast Gulf producers delivering some of the largest hikes. Saudi Arabia and the UAE - which hold most of the group's remaining spare capacity - raised production by 100,000 b/d and 60,000 b/d, respectively. Nigerian production rose to a five-month high of 1.5mn b/d. Although 180,000 b/d under quota, Nigeria's January output marked a recovery from the fourth quarter of last year when production was hit by a number of sabotage incidents and infrastructure issues.

Russia and Oman were the only non-Opec members of the group that managed to raise production last month. Russia, which is fast running out of spare capacity, delivered a 90,000 b/d increase to take its output above 10mn b/d for the first time since April 2020, but it was still short of its January quota. Argus estimates that the country's crude capacity stands at 10.3mn b/d, and its Opec+ ceiling for March is slightly above that.

Several of the group's large producers saw their production decline last month, including Iraq, where crude exports were constrained by adverse weather, and Kazakhstan, where protests briefly interrupted operations at the Tengiz field.

Of the three Opec countries that are exempt from quotas, Iran was the only one to increase output in January. Firmer exports pushed Iranian production 30,000 b/d higher. Talks to revive the 2015 nuclear deal and remove US sanctions on Iranian oil exports restarted this month, with EU high representative for foreign affairs Josep Borrell saying on 8 February that discussions are "in the last metres of the game". Ironing out banking and shipping arrangements could hamper access to Iranian supplies up to six months after sanctions are lifted, according to some trading sources.

After three months of consecutive gains, Venezuelan output dropped by 60,000 b/d in January. Venezuela has been importing Iranian condensate to dilute and upgrade extra-heavy crude from the Orinoco belt into an exportable heavy sour grade in recent months, but analysts note that the latest shipment was delayed.

By Ruxandra Iordache

Opec+ wellhead production	mn b/d
January	December*	Jan target	Compliance %
Opec 10	24.00	23.79	24.55	126
Non-Opec 9	13.94	13.89	14.19	120
Total	37.94	37.68	38.74	124
Opec
Saudi Arabia	10.05	9.95	10.12	108
Iraq	4.25	4.26	4.28	108
Kuwait	2.58	2.56	2.59	102
UAE	2.93	2.87	2.92	94
Algeria	0.97	0.96	0.97	102
Nigeria	1.50	1.44	1.68	225
Angola	1.15	1.20	1.41	310
Congo (Brazzaville)	0.27	0.27	0.30	220
Gabon	0.20	0.18	0.17	-87
Equatorial Guinea	0.10	0.10	0.12	270
Opec 10	24.00	23.79	24.55	126
Iran	2.50	2.47	na	na
Libya	1.00	1.04	na	na
Venezuela	0.69	0.75	na	na
Total Opec 13†	28.19	28.05	na	na
Non-Opec production
Russia	10.04	9.95	10.12	109
Oman	0.81	0.79	0.81	103
Azerbaijan	0.58	0.60	0.66	241
Kazakhstan	1.62	1.65	1.57	64
Malaysia	0.42	0.42	0.55	372
Bahrain	0.17	0.18	0.19	226
Brunei	0.09	0.09	0.09	170
Sudan	0.06	0.06	0.07	250
South Sudan	0.16	0.15	0.12	-236
Total non-Opec†	13.94	13.89	14.19	120
*revised figures
†Iran, Libya and Venezuela are exempt from the agreement