Opec+ crude output holds steady

Higher Saudi supply helped keep Opec+ crude production steady in February, while Russian output held firm in the face of EU sanctions.

Russian output was relatively stable in February. But its crude exports fell by 150,000 b/d, and 190,000 b/d went into storage as buyers became increasingly difficult to find under the EU's embargo and G7 price cap regime. Most of the Russian export cuts were to pipeline shipments to Europe, which are exempt from the EU's ban. Russia stopped shipping crude to Poland through the Druzhba pipeline system towards the end of last month. No Druzhba deliveries are scheduled to Poland for March either. Germany, which stopped taking Russian crude through Druzhba at the start of the year, received 5,000 b/d of Kazakh crude through the pipeline for its 226,000 b/d Schwedt refinery in February. It is scheduled to get the same amount again this month.

Russian crude output is expected to fall this month after the government said it would cut production by 500,000 b/d in March. But Opec producers showed no signs in February of raising production to compensate for the impending drop in Russian supply. Output from the 10 Opec members subject to quotas was unchanged on the month at 24.47mn b/d, Argus estimates, with higher Saudi production offsetting a fall in supplies from other Mideast Gulf producers and Angola. Opec production was 950,000 b/d below its collective February target, while Opec+ as a whole was over 2mn b/d short. Saudi Arabia produced 80,000 b/d under its ceiling last month, Iraqi production was 130,000 b/d below quota, while west African producers combined fell 760,000 b/d short.

Nigerian production rose for a fifth consecutive month to reach a 10-month high of 1.4mn b/d. But the country's Bonny Light exports look likely to be disrupted this month following an explosion on 3 March on the 180,000 b/d Trans Niger Pipeline, which carries crude to the Bonny export terminal. Most other west African countries also raised their production in February, although the combined increase only served to offset an 80,000 b/d fall in output from Angola, which was caused in part by scheduled maintenance at the Dalia floating production, storage and offloading (FPSO) vessel. Iraqi production was down by 100,000 b/d on the back of refinery maintenance and maintenance at the 450,000 b/d West Qurna-2 field.

By Denise Albrighton