OPEC countries failed to fulfill the plan to increase oil production

OPEC countries were able to increase oil production in January 2022 by 64 thousand barrels per day (b / d) and bring it to 27.98 million b / d, according to the February OPEC report.

In January, oil production in Saudi Arabia amounted to 9.99 million barrels per day (an increase of 54 thousand barrels per day compared to December) instead of the 10.122 million barrels per day possible according to the schedule. Nigeria produced 1.4 mb/d of oil (up 81,000 b/d), while the chart shows 1.68 mb/d. Iraq cut production by 27,000 b/d and produced 4.25 million b/d in January against the scheduled 4.28 million b/d. The UAE fulfilled the quota: it produced 2.92 million bpd (an increase of 44 thousand bpd) in January, according to the schedule – 2.91 million bpd, follows from the document of the oil exporting countries.

At the same time, for the first time, OPEC countries implemented the terms of the deal to reduce oil production – by 135% in January (in December this figure was 126%). The volume of oil cuts amounted to 2.881 million b/d compared to the baseline in the agreement instead of the stipulated 2.130 million b/d.

The countries of the Vienna Agreement (OPEC +) have been reducing oil production since May 2020, but from the beginning of 2021 this process is gradually being restored. Since August 2021, an increase of up to 400,000 bpd per month has become acceptable. This condition is valid until March 2022 inclusive. Not everyone is able to restore production at such a pace: 10 OPEC countries participating in the agreement account for 254,000 bpd. In January, they were able to increase production by only 137 thousand bpd and produced 23.9 million bpd instead of the 24.554 million bpd stipulated by the agreement.

In early February, the OPEC+ countries decided to leave the terms of the deal on oil production unchanged. According to experts, this will stabilize the market and strengthen quotes at the current level.