Opec+ issues August, September quotas

Market: Crude oil
26/07/21

The Opec+ coalition's two largest producers, Saudi Arabia and Russia, can raise crude output to 9.6mn b/d in August and 9.704mn b/d in September, according to quotas seen by Argus.

Both countries can lift production by just over 100,000 b/d in each of the two months, as outlined in an Opec+ internal document (see table for full August and September group quotas).

This follows the 18 July approval by Opec+ for a collective 400,000 b/d output increase in each month of the August 2021-April 2022 period, and then of a rise of around 432,000 b/d from May next year until the group's cuts are unwound by the end of 2022. This includes a three-month window in which the group can pause these increases in response to any change in the fundamental outlook.

As of next May, the baseline levels that determine individual countries' output targets and compliance will be raised for five participants — the UAE, Saudi Arabia, Russia, Iraq and Kuwait.

Opec+ will hold regular ministerial meetings that will approve or adjust the 400,000 b/d monthly rises, and will meet on 1 September to decide quotas beyond that month, a delegate said.

The latest Opec+ policy was agreed following a two-week impasse, leaving deal participants with just under two weeks to adjust their August export or refinery-use programmes to accommodate the higher output. But the small pro-rata distribution of the increase will probably see some of the additional crude head into storage. More than half of the deal's participants will raise production by or under 10,000 b/d next month — not enough to accumulate a standard-size 600,000 bl export cargo. Mideast Gulf producers had allocated their August-loading supplies in the first half of July, although Russia's more-prompt loading schedule releases may have allowed for higher output to be reflected in exports. A loading programme circulated today shows exports of Urals and Siberian Light crude higher by 8pc on the month in August.

Saudi Arabia faces sharply higher crude-burn requirements to meet air conditioning needs in the summer moths. Riyadh saw its highest level of direct crude burn of 2020, at 702,000 b/d, in August, according to the Joint Organisations Data Initiative (Jodi).

By Ruxandra Iordache

Opec+ quotas				mn b/d
Country	Baseline	July target	August target	September target

Saudi Arabia	11.000	9.495	9.600	9.704
Iraq	4.653	4.016	4.061	4.105
Kuwait	2.809	2.425	2.451	2.478
UAE	3.168	2.735	2.765	2.795
Algeria	1.057	0.912	0.922	0.932
Nigeria	1.829	1.579	1.596	1.614
Angola	1.528	1.319	1.333	1.348
Congo (Brazzaville)	0.325	0.281	0.284	0.287
Gabon	0.187	0.161	0.163	0.165
Equatorial Guinea	0.127	0.110	0.111	0.112
Opec total	26.683	23.033	23.286	23.540
Russia	11.000	9.495	9.600	9.704
Mexico	1.753	1.753	1.753	1.753
Oman	0.883	0.762	0.771	0.779
Azerbaijan	0.718	0.620	0.627	0.633
Kazakhstan	1.709	1.475	1.491	1.508
Malaysia	0.595	0.514	0.519	0.525
Bahrain	0.205	0.177	0.179	0.181
Brunei	0.102	0.088	0.089	0.090
Sudan	0.075	0.065	0.065	0.066
South Sudan	0.130	0.112	0.113	0.115
Non-Opec total	17.170	13.308	13.454	13.601
Opec+ total	43.853	36.341	36.740	37.141
Source: OPEC document
*Iran, Libya and Venezuela are exempted from cuts under the current deal

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