Opec+ production lower on fall in Russian output

Spanish Market: Crude oil
06/04/23

Opec+ crude production dipped in March on the back of a decline in Russian output, although the drop fell short of the full 500,000 b/d cut pledged by Moscow.

Russian crude production was down only 100,000 b/d on the month in March to 9.7mn b/d, Argus estimates, despite Moscow's high-profile pledge to reduce output by 500,000 b/d. Russia's deputy prime minister Alexander Novak first announced the 500,000 b/d cut on 10 February, but acknowledged on 24 March that the full reduction had yet to be reached. Preliminary indications suggest overall crude exports from Russia were stable last month. A rise in Urals loadings more than offset a drop in shipments through the Druzhba pipeline and reduced ESPO Blend liftings from Kozmino.

Lower Russian output led to a fall in production from the non-Opec contingent of the Opec+ coalition to 13.51mn b/d in March, down by 110,000 b/d compared with February. Production by the 10 Opec countries with quotas was 20,000 b/d higher at 24.49mn b/d as maintenance in Angola and lower production from some other west African members was offset by an increase in Saudi output and an ongoing recovery in Nigerian supply. Opec+ producers with quotas pumped 2.1mn b/d below their combined target last month, with Russia producing around 780,000 b/d under quota and west African member countries making up a large chunk of the remaining shortfall.

In Angola, maintenance at the Dalia floating production, storage and offloading (FPSO) vessel helped push the country's production down to 1mn b/d in March, the lowest in nearly two decades. Output is expected to recover in April, with exports scheduled to rise to 1.1mn b/d following a resumption in Dalia shipments. Nigerian production climbed for a sixth consecutive month to its highest in over a year, helping to narrow the shortfall relative to its target to around 270,000 b/d, from a peak of 780,000 b/d in September last year.

An uptick in exports and higher domestic refinery runs led to a rise in output in Saudi Arabia last month, while Iraqi production edged higher following a fall in February driven by field maintenance and refinery turnarounds. The halt to around 400,000 b/d of exports from the semi-autonomous Kurdistan region from 25 March resulted in some output in northern Iraq being shut in. The Kurdistan Regional Government (KRG) and the federal government in Baghdad struck a deal on 4 April, paving the way for a resumption of crude exports from the region via Turkey's Ceyhan port.

By Denise Albrighton

Opec+ production				mn b/d
	Mar	Feb*	Mar target	Difference to target

Opec 10	24.49	24.47	25.42	-0.93
Non-Opec 9	13.51	13.62	14.69	-1.17
Total	38.00	38.09	40.10	-2.10
*revised

Opec wellhead production				mn b/d
	Mar	Feb	Mar target	Difference to target

Saudi Arabia	10.45	10.40	10.48	-0.03
Iraq	4.35	4.30	4.43	-0.08
Kuwait	2.70	2.66	2.68	0.02
UAE	3.02	3.04	3.02	0.00
Algeria	1.01	1.02	1.01	0.00
Nigeria	1.47	1.40	1.74	-0.27
Angola	1.00	1.07	1.46	-0.46
Congo (Brazzaville)	0.26	0.28	0.31	-0.05
Gabon	0.19	0.22	0.18	0.01
Equatorial Guinea	0.04	0.08	0.12	-0.08
Opec 10	24.49	24.47	25.42	-0.93
Iran	2.60	2.57	na	na
Libya	1.15	1.15	na	na
Venezuela	0.70	0.69	na	na
Total Opec 13*	28.94	28.88	na	na
*Iran, Libya and Venezuela are exempt from production targets

Non-Opec crude production				mn b/d
	Mar	Feb*	Mar target	Difference to target

Russia	9.70	9.80	10.48	-0.78
Oman	0.83	0.84	0.84	-0.01
Azerbaijan	0.52	0.53	0.68	-0.16
Kazakhstan	1.63	1.63	1.63	0.00
Malaysia	0.39	0.40	0.57	-0.18
Bahrain	0.18	0.17	0.20	-0.01
Brunei	0.07	0.07	0.10	-0.02
Sudan	0.07	0.07	0.07	-0.00
South Sudan	0.11	0.11	0.12	-0.01
Total non-Opec	13.51	13.62	14.69	-1.17
*revised

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

05/05/25

California refinery closures panic politicians

Houston, 5 May (Argus) — California could lose up to 17pc of its refining capacity within a year, triggering major concerns about its tightly supplied and frequently volatile products market. US independent Valero announced on 16 April that it will shut or repurpose its 145,000 b/d Benicia refinery near San Francisco by April 2026. The firm is also evaluating strategic alternatives for its 85,000 b/d Wilmington refinery in Los Angeles. And independent Phillips 66 said in October that it would shut its 139,000 b/d Los Angeles refinery in the fourth quarter of this year. Valero's Benicia announcement brought a quick reaction from state officials. Governor Gavin Newsom on 21 April urged regulators at the California Energy Commission (CEC) to work closely with refiners through "high-level, immediate engagement" to make sure Californians have access to transport fuels. He has ordered them to recommend by 1 July any changes to California's approach that are needed to ensure adequate fuel supply during its energy transition. The message appears to have hit home. The CEC delayed a vote on new refinery resupply rules to provide time for additional feedback and consultation with stakeholders after the Valero announcement. The CEC also plans to introduce a rule this year for minimum inventory requirements at refineries in the state as well as possible rules on setting a refiner margin cap. The new rules are part of an effort by Newsom to mitigate fuel price volatility in California, including the signing of two pieces of legislation known as AB X2-1 and SB X1-2. Refiners have been unhappy with the state's regulatory and enforcement environment for some time. It is "the most stringent and difficult" in North America owing to 20 years of policies pursuing a move away from fossil fuels, Valero chief executive Lane Riggs says. The long and short of it Refinery closures are fuelling long and short-term supply concerns in California. The most immediate is an anticipated supply crunch at the end of this summer. Phillips 66's plan to shut the Los Angeles refinery by October will deal a significant blow to the state's refining capacity and is likely to occur at a time when Californian gasoline prices are most prone to volatility. The US west coast is an isolated market, many weeks sailing time from alternative supply sources in east Asia or the US Gulf coast. California's strict product specifications further limit who can step in when refinery output falls. The state sometimes sees price spikes in late summer and early autumn because the switch from summer gasoline blends leaves local inventories low while in-state refineries adjust to producing winter grades. California gasoline prices spiked in September 2022 when stocks fell to a nine-year low on the west coast. Spot deliveries hit a record $2.45/USG premium to Nymex Rbob futures in the Los Angeles market at the time (see graph). Production problems at several refineries in southern California led to another spot price surge in September 2023. The California Air Resources Board (Carb) permitted an earlier switch to cheaper winter gasoline production in response to both events. Refinery closures will force California to rely on imports in the longer term, leaving the state exposed to stretched supply lines. State regulators' proposed solutions have raised eyebrows. The CEC's Transportation Fuels Assessment report in August last year included a policy option in which California would buy and own refineries, which the state is not pursuing. Another option involves state-owned products reserves to allow rapid deployment of fuel when needed. The CEC and Carb regulators will also release a draft transportation fuels transition plan later this year. By Eunice Bridges and Jasmine Davis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Crude futures slump after Opec+ output decision

05/05/25

Crude futures slump after Opec+ output decision

Singapore, 5 May (Argus) — Crude oil futures slumped to new four-year lows in Asian trading today after a core group of Opec+ members agreed to further increase output. The front-month July Ice Brent contract fell by 4.6pc to a low of $58.50/bl. June WTI futures on Nymex traded as low as $55.30/bl, a drop of 5.1pc. Prices fell after eight Opec+ members agreed on 3 May to accelerate a plan to unwind production cuts . Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan will raise their collective output target by 411,000 b/d in June, three times as much as planned in the original roadmap to gradually unwind 2.2mn b/d of crude production cuts by the middle of 2026. Prices fell despite the prospect of further violence in the Middle East. A ballistic missile fired by Yemen's Houthi militant group hit Israel's main airport early on 4 May, prompting several airlines to suspend flights to the country. Israel pledged to retaliate against the Houthis and the group's backers in Tehran. By Kevin Foster Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec+ eight agree accelerated hike for June: Update

03/05/25

Opec+ eight agree accelerated hike for June: Update

London, 3 May (Argus) — A core group of eight Opec+ members has agreed to accelerate, for a second consecutive month, their plan to unwind some of their production cuts, the Opec secretariat said Saturday. As it did for May, the group will again raise its collective output target by 411,000 b/d in June, three times as much as it had planned in its original roadmap to gradually unwind 2.2mn b/d of crude production cuts by the middle of next year. The original plan envisaged a slow and steady unwind over 18 months from April, with monthly increments of about 137,000 b/d. But today's decision means that the eight — Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan — will have unwound almost half of the 2.2mn b/d cut in the space of just three months. The decision to maintain this accelerated pace into June is somewhat surprising, given the weakness in oil prices and the outlook for the global economy. The eight's decision last month to deliver a three-in-one hike in May was seen as a key reason for the recent slide in oil prices, alongside US President Donald Trump's tariff policies. Front month Ice Brent futures have fallen by about $13/bl since early April to stand at just over $61/bl. But the eight today pointed to "current healthy market fundamentals, as reflected in the low oil inventories" as a key factor in its latest decision. It reiterated, as it has in the past, that the gradual monthly increases "may be paused or reversed subject to evolving market conditions." As was the case for May, delegates said that the main driver for the June hike was again a desire to send a message to those countries that have persistently breached their production targets since the start of last year — most notably Kazakhstan and Iraq, which each have significant overproduction to compensate for through the middle of next year. "This measure will provide an opportunity for the participating countries to accelerate their compensation," the secretariat said. This group of eight is due to next meet on 1 June to review market conditions and decide on July production levels. By Nader Itayim, Aydin Calik and Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Opec+ eight to agree another accelerated hike for June

03/05/25

Opec+ eight to agree another accelerated hike for June

London, 3 May (Argus) — A core group of eight Opec+ members look set to today to accelerate, for a second consecutive month, their plan to unwind some of their production cuts, four delegates told Argus . As it did for May, the group would again raise its collective output target by 411,000 b/d in June, three times as much as it had planned in its original roadmap to gradually unwind 2.2mn b/d of crude production cuts by the middle of next year. The original plan envisaged a slow and steady unwind over 18 months from April, with monthly increments of about 137,000 b/d. But today's decision would mean that the eight — Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan — will have unwound almost half of the 2.2mn b/d cut in the space of just three months. The decision to maintain this accelerated pace into June would be somewhat surprising, particularly given the weakness in oil prices and the outlook for the global economy. The eight's decision last month to deliver a three-in-one hike in May was seen as a key reason for the recent slide in oil prices, alongside US President Donald Trump's tariff policies. Front month Ice Brent futures have fallen by about $13/bl since early April to stand at just over $61/bl. While Opec+ has said that it is acting to support an expected rise in summer demand, the decision to speed up the output increases once again appears to be driven by a desire to send a message to countries that have persistently breached their production targets — most notably Kazakhstan and Iraq. By Aydin Calik, Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Eight Opec+ members weigh further acceleration

02/05/25

Eight Opec+ members weigh further acceleration

Dubai, 2 May (Argus) — A core group of eight Opec+ producers meet on 3 May to decide whether to repeat last month's surprise move to add extra oil to an increasingly weak market. The main motivation for the group of eight's decision to triple the size of their output increase for May remains, suggesting that a repeat could be on the cards for June. As the dust began to settle on last month's decision, it became clear that raising their combined output target by 411,000 b/d in one month, rather than the scheduled 137,000 b/d, was rooted not only in stronger fundamentals, as the official communique suggests, but also in a desire to send a message to those countries that have persistently breached their production targets. The main culprits are Iraq and Kazakhstan, which have consistently failed to keep their production in check since the start of last year (see graph). The two are left with a lot to do by way of compensating for those excess barrels between now and the middle of next year (see graph). Russia, too, has overproduced during that period, but to a much lesser degree relative to its overall output. That persistent overproduction has been a source of deep frustration among other countries in the group of eight — principally the core of Opec's Mideast Gulf members — that have "sacrificed", in the words of one delegate, to adhere to their targets. April's decision was a nod to those that have sacrificed and a sharp warning to Kazakhstan and Iraq to do better and to do so quickly. Two delegates stressed to Argus at the time that the coming weeks would be critical for Baghdad and Astana to show that they were serious about abiding by their quotas. Failure to do so could trigger another "surprise" move for June, they said, possibly even another three-in-one hike. It was little surprise, then, that some ill-timed comments by Kazakh energy minister Yerlan Akkenzhenov on 23 April — in which he explicitly said Astana's national interests take priority over its Opec+ commitments, and that the country simply "cannot" reduce output — triggered serious speculation about whether the eight may repeat last month's decision. March data from Iraq, too, were not ideal, in that while they showed that Iraq did produce below quota, its efforts to compensate fell well short. Timing is everything Some in the group of eight may well be tempted to go down that route, thinking a second consecutive "shock" could deliver the desired wake-up call that the first did not. Two delegate sources confirmed to Argus that another 411,000 b/d target increase for June remains a distinct possibility. But such a course of action would be risky. Crude is already trading $12/bl below where it was when the group last met, and demand-side concerns are again on the rise because of the potential impact of US trade tariffs. The Opec secretariat and the IEA downgraded 2025 oil demand growth forecasts in their latest oil market outlooks. Opec revised its forecast down to 1.3mn b/d from 1.45mn b/d in its previous report. The IEA revised down its forecast by a sizeable 310,000 b/d to 730,000 b/d for 2025, despite "robust" consumption in the first quarter. It downgraded its forecast for April-December by 400,000 b/d. Another three-in-one hike for June would be "difficult" to imagine in this market, one delegate says. With that said, the eight's options include a "standard" 137,000 b/d rise to the group's collective target for June, in line with the original schedule, or, at a push, a two-in-one hike. That would not only send that internal message to the least compliant of the group, but also act as a show of good faith towards US president Donald Trump ahead of his visit to Riyadh, Abu Dhabi and Doha on 13-16 May. By Nader Itayim, Bachar Halabi and Aydin Calik Opec+ overproducers Opec+ compensation plan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more