The latest Platts survey of OPEC and oil industry officials and analysts show that oil production from the Organization of the Petroleum Exporting Countries and certain OPEC members fell in December, while Iran’s output was on the rise.
Platts survey said oil production from the Organization of the Petroleum Exporting Countries (OPEC) fell by 130,000 barrels per day (b/d) in December on lower volumes from Iraq, Nigeria and Saudi Arabia.
‘Collapsing oil prices and oversupply used to be a recipe for, at the very least, an emergency OPEC meeting,’ said Margaret McQuaile, senior correspondent for Platts, a leading global provider of energy and commodities information. ‘That is no longer the case, however, and Saudi Arabia and its (Persian) Gulf allies appear to be as committed to their laissez-faire production policy as they ever were. Without the support of these countries for an emergency meeting, it seems unlikely that one will take place – in the very short term, at any rate.’
Volumes from kingpin producer Saudi Arabia dipped last month by 50,000 b/d to 10.1 million b/d. The kingdom is facing an unprecedented budget crunch amid the steep drop in oil prices since mid-2014. Despite sliding oil prices, however, it has given no indication that it is ready to abandon the market share strategy that it persuaded OPEC to adopt in November 2014. Indeed, although the December volume was down from that of November, Saudi output remains above the 10 million b/d it has consistently exceeded since March last year.
The new budget, King Salman’s first since taking the throne in January 2015, forecasts spending of nearly $224 billion, only a small reduction in planned spending compared with 2015. In a research note following the government’s announcement in December, Riyadh-based Jadwa Investments estimated the budget to be based on an average crude oil export price of $40.30/b and production of 10.2 million b/d.
Iraqi output fell by 50,000 b/d month on month, to 4.25 million b/d from an adjusted November volume of 4.3 million b/d.
Indonesia, which has rejoined OPEC, is estimated to have produced some 700,000 b/d of crude in December.
It added that Iranian crude output and exports are expected to rise in the coming months.
It noted that Iran has said it plans to double its oil exports to 2 million b/d within six months of the removal of sanctions.