OPEC’s crude production held steady in December as the group approached a fresh year of output curbs in full compliance with its supply deal.
The 14 members of the Organization of Petroleum Exporting Countries pumped 32.47 million barrels a day, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data.
Libya saw a 30,000-barrel-a-day decline to 970,000 a day following a pipeline blast, which was offset by an increase from Nigeria. Both countries were exempt from cuts last year but are now expected to join the effort with a combined limit of 2.8 million barrels a day. OPEC and its allies agreed Nov. 30 to extend their output agreement until the end of 2018 to balance the market.
Production in Saudi Arabia, OPEC’s biggest member, slipped by 20,000 barrels a day to 9.95 million a day, the surveyed showed. Venezuela, which has suffered a slump in output amid economic collapse and U.S. sanctions, reduced volumes by a further 50,000 barrels a day to 1.81 million a day.
But, as OilPrice.com’s Tsvetana Paraskova writes, despite the fact that Russia is cutting its oil production as part of OPEC and allies’ deal to restrict global oil supply, Moscow’s average daily crude oil production inched up again in 2017, to a 30-year-high of 10.98 million bpd, according to Russian Energy Ministry data.
Non-OPEC Russia, like OPEC’s de facto leader Saudi Arabia and most of the other cartel members, entered the joint deal on January 1, 2017 at a very high level of production, which took much of the sting out of the cuts. In the last quarter of 2016, Russia’s production had hit a post-Soviet era high, while year over year in 2016, production grew to 10.96 million bpd, from 10.72 million bpd in 2015.
Russia’s pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from the October 2016 level, which was the country’s highest monthly production in almost 30 years–11.247 million bpd.
Moscow’s commitment to the deal, however, included a gradual reduction until reaching the 300,000-bpd cut by the spring of 2017, so for a few months in early 2017, Russia’s monthly production was above 11 million bpd.
Russia’s oil production in December 2017 was 10.95 million bpd, up from 10.94 million bpd in November, driven by 0.2-percent growth in production at the biggest oil firm, Rosneft.
For the whole of 2017, Russia’s average annual oil production increased for a ninth year in a row.
To compare, in 1999, the average annual oil production in the country was 6.1 million bpd.
The Russia-led non-OPEC producers and OPEC agreed at the end of November to extend their production cut pact to the end of 2018, in their efforts to continue drawing down the global oil overhang. If the deal holds until the end of this year, Russia’s oil production growth could stall, considering its commitment to the pact.