OPEC+ Agrees to 100,000 bpd Oil Production Increase for September

OPEC+ Agrees to 100,000 bpd Oil Production Increase for September

/ Policy & Regulations / Thursday, 04 August 2022 10:51

During their August 3 meeting, the OPEC+ agreed to increase its targeted production by 100,000 barrels per day (bpd) in September – equivalent to 0.1% of the global demand of around 100 million barrels of oil per day.

The group had agreed to raise output by 648,000 barrels per day in July-August, up from 432,000 barrels a day in recent months.

The decision follows after US President Joe Biden requested the group increase production to tackle the supply disruption caused by Russia’s invasion of Ukraine. Many OPEC+ members, including Russia, have lagged in their production quotas, and only Saudi Arabia and the UAE are deemed to have substantial spare capacity.

The meeting noted that "chronic underinvestment in the oil sector has reduced excess capacities along the value chain (upstream/midstream/downstream)."

It also noted that the severely limited availability of excess capacity necessitates utilizing the spare capacity with great caution in response to severe supply disruptions.

The meeting highlighted, with particular concern, that insufficient investment into the upstream sector will impact the availability of adequate supply in a timely manner to meet growing demand beyond 2023 from non-participating non-OPEC oil-producing countries, some OPEC member countries as well as participating non-OPEC oil-producing countries.

As of this writing, Brent crude oil futures were at $96.80 and West Texas Intermediate (WTI) at $90.80.

The US has determined the "smaller increase” will keep the price of oil low in the future. The gas price in the US has fallen to $4 per gallon compared to $5 up until last month.

Under the new OPEC+ quotas for September, Saudi Arabia's production limit will rise by around 26,000 bpd and the UAE's by 7,000 bpd. The Group’s smaller producers did not get an increase in their quotas agreed to from July 2021. Saudi Arabia and UAE  produce around 10 to 12 million bpd and 3 to 4 million bpd, respectively.

September 2022 Required Production table (OPEC)

 Algeria

 1057

 Angola

 1529

 Congo

 325

 Eq.Guinea

 127

 Gabon

 187

 Iraq

 4663

 Kuwait

 2818

 Nigeria

 1830

 Saudi Arabia

 11030

 UAE

 3186

 Azerbaijan

 718

 Bahrain

 205

 Brunei

 102

 Kazakhstan

 1710

 Malaysia

 595

 Mexico

 1753

 Oman

 883

 Russia

 11030

 Sudan

 75

 South Sudan

 130

 OPEC 10

 26753

 Non-OPEC

 17202

 OPEC+

 43955

 

Also read: US LNG Exports Were World’s Highest in H12022

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