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OPEC struggling to achieve oil boost

Reuters reports having seen an internal document prepared by OPEC’s Vienna headquarters for a technical panel. It reveals that it and its partners are facing difficulties in delivering the output increases agreed in June.

The June agreement laid the way for a return to 100% compliance with the current production quotas, which is commonly interpreted as adding an extra million bpd (barrels per day) to May’s production levels. The document would seem to suggest they are still some way off that target.

While Saudi Arabia did up its production by 524,000 bpd between May and September—together with other smaller increases from Kuwait, Iraq and the United Arab Emirates—the gains were offset by declining production from Iran, which is facing imminent US sanctions, resulting in a drop of 376,000 bpd. There was also a sizeable production drop of 189,000 bpd in Venezuela. Overall, the cartel’s members—not counting Nigeria, Congo and Libya—pumped an additional 428,000 bpd over the period.

Among the non-member parties to the deal, Russia increased its production by 389,000 bpd, but declines in Kazakhstan, Malaysia and Mexico brought the overall gain down to 296,000 bpd. Alexander Novak, Russia’s Energy Minister, has recently said he does not expect production to grow substantially more in the near term, citing that it would not suit the country’s long-term economic aims. The country is also subject to sanctions that have prevented foreign oil companies like ExxonMobil, the energy giant behind lubricants like Mobil SHC 630, from transferring technical knowhow to projects there.

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