Opec+ output rise capped by Kazakh, Nigerian losses

The 19 countries participating in the Opec+ deal increased their collective crude production by 100,000 b/d in August, with higher output from Russia and Middle East producers offsetting declines in Kazakhstan and Nigeria.

Argus' latest survey shows the deal participants produced 35.85mn b/d last month — up from July's 35.75mn b/d but 890,000 b/d below the group's August ceiling of 36.74mn b/d, leaving overall compliance at 117pc, compared with 110pc in the previous month.

Opec+ heavyweights Saudi Arabia and Russia drove last month's increase, raising their respective output by 150,000 b/d and 110,000 b/d. While Riyadh stayed under quota, Moscow exceeded its cap, leaving its spare capacity below 700,000 b/d based on IEA figures from earlier this year. Other notable increases came from Iraq, Opec's second-largest producer, which recorded its highest month-on-month growth since March, up by 80,000 b/d amid a surge in Basrah exports. The UAE added 60,000 b/d.

These rises compensated for operational problems in Nigeria, where output has fallen every month since April. Nigeria shed another 50,000 b/d in August to hit a seven-month low of 1.34mn b/d. Argus estimates that loadings of key Nigerian grade Forcados eased to 55,000 b/d last month from 191,000 b/d in July, after a leak prompted Shell to declare force majeure on exports from the Forcados terminal on 16 August.

Maintenance at the Qua Iboe terminal in the second half of August, as well as disruption at the Bonny Light and Brass River terminals, further constrained Nigerian supply. Nigeria saw some improvement by the end of the month and production will be back to the country's Opec+ quota by October at the latest, according to state-owned NNPC's managing director Mele Kyari.

The group's biggest drop in output came from non-Opec Kazakhstan, where maintenance at the Tengiz field drove a 220,000 b/d decline, leaving the country over 200,000 b/d below its 1.49mn b/d August ceiling. Kakakhstan told the Opec+ Joint Technical Committee (JTC) that it would be 250,000 b/d under its August quota and 170,000 b/d below its September cap to help compensate for past overproduction.

Libya, which remains exempt from the restraint pact, saw a 10,000 b/d drop in output last month after a leak disrupted the operations of state-owned NOC subsidiary Waha Oil. Libyan supply has come under further threat in the past week, with protests intermittently disrupting loadings at three eastern ports — Es Sider, Marsa el-Hariga and Ras Lanuf, which shipped a combined 595,000 b/d in June-August, according to Argus tracking. Demonstrator demands range from the dismissal of NOC chairman Mustafa Sanalla to students calling for jobs. Temporary closures are frequent in Libya and can quickly reduce production because of scant storage options. Longer-term blockades — such as last year's eight-month outage — are typically politically led and militarily sustained. Es Sider and Ras Lanuf resumed activity today.

By Ruxandra Iordache