Opec+ output down despite Russian rebound

Opec+ production fell in April as a rebound in Russian supply was not enough to offset disruptions affecting Iraqi and Nigerian output.

Russian production rose by about 130,000 b/d last month, following a 200,000 b/d fall in March, according to Argus' latest estimate. Crude supply to Russian refineries was lower in April but exports were higher, as seaborne Urals and ESPO Blend loadings, as well as Druzhba pipeline deliveries, all increased compared with March.

The April data contain little to suggest Russia is making good on its pledge to cut production by 500,000 b/d compared with February levels, although deputy prime minister Alexander Novak on 4 May insisted that the country is implementing the announced reductions.

The higher Russian supply and steady output by other non-Opec members of the coalition coincided with a 350,000 b/d fall in production from the 10 Opec members subject to targets. Output from the Opec contingent was down to 24.1mn b/d in April, the lowest since January 2022, leaving it 1.3mn b/d below target (see table). Combined Opec+ production undershot the group's collective quota by about 2.4mn b/d.

Iraq's production declined by 200,000 b/d in April after Turkey halted piped Kirkuk deliveries from the Kurdistan Regional Government's (KRG) part of northern Iraq to the Mediterranean port of Ceyhan on 25 March. The decision was triggered by an international arbitration court ruling that Turkey had breached a 1973 pipeline agreement by allowing KRG oil to be exported without Baghdad's consent in 2014-18.

A deal between the KRG and Iraq's federal government in Baghdad in early April appeared to pave the way for Kirkuk exports to resume but the two sides have since struggled to resolve a number of technical difficulties. They should reach an agreement within "one to two weeks", Iraqi oil minister Hayan Abdulghani said on 3 May, although Iraqi prime minister Mohammed Shia al-Sudani later suggested a restart hinges on Turkey.

Nigeria falters

Nigeria's recent upstream recovery faltered in April and production dropped for the first time in six months. Output of the country's Forcados grade was nearly 90,000 b/d lower at 160,000 b/d as a result of reduced pipeline flows that Shell attributed to crude theft. Production of Qua Iboe, Erha, Usan and Yoho was disrupted by industrial action that prompted ExxonMobil to declare force majeure at the four grades' respective loading terminals. Qua Iboe output fell by about 20,000 b/d on the month to 130,000 b/d, while Erha production declined by nearly 50,000 b/d.

Kuwaiti production declined following problems at the country's new 615,000 b/d al-Zour refinery. Two 205,000 b/d crude units at the refinery were shut in early April because of technical issues, although one of them returned to service in the final week of the month. A rise in exports from Kuwait failed to compensate for the drop in domestic refining demand. Higher production in Saudi Arabia, driven by increased exports, and Angola, following the end of maintenance at the Dalia floating production, storage and offloading vessel, only partly offset the declines in Nigeria and Kuwait.

Venezuelan production increased in April, despite turmoil affecting the country's upstream because of investigations into oil sector theft and a series of arrests, as well as continued government interference in the industry's operations. Output was higher in the main production regions, including the Orinoco extra-heavy oil belt and the western and eastern output divisions. Chevron told investors last week that its Venezuelan production could rise by 50pc this year from about 100,000 b/d at present.

By Denise Albrighton