OPEC Turns On The Taps To Counter Iranian Outages

Iran’s crude oil production dropped by 371,000 bpd between the second quarter of this year—when the U.S. announced the return of the sanctions—and September, according to the secondary sources in OPEC’s closely-watched Monthly Oil Market Report published on Thursday.

Iran’s oil production in September plunged by 150,000 bpd from August to reach 3.447 million bpd last month. This compares to average Iranian production of 3.818 million bpd in the second quarter this year, as per OPEC’s secondary sources, highlighting the fact that Iran has been cutting oil production, although not at the fast rate at which its exports have been dropping over the past two months.

Iran, for its part, claims a much smaller loss in its oil production—Tehran self-reported to OPEC that its crude oil production in September stood at 3.755 million bpd, down by 51,000 bpd from August, when Iran self-reported production of 3.806 million bpd, compared to OPEC’s secondary sources estimate of 3.597 million bpd for August. Iran’s self-reported average production for the second quarter was 3.804 million bpd.

Among all OPEC members, Iran booked the steepest decline in production in September, followed by another slump in Venezuela—this time by 42,000 bpd to below the 1.2-million-bpd mark—1.197 million bpd, according to secondary sources.

Other OPEC members, however, almost entirely compensated for the loss of production in Iran and Venezuela—OPEC’s total production increased by 132,000 bpd in September to 32.761 million bpd. OPEC’s biggest producer Saudi Arabia opened up the taps to add 108,000 bpd of production last month, lifting output to 10.512 million bpd. Riyadh’s self-reported number is very close to the secondary sources—10.502 million bpd.

Another big jump came from Libya, whose oil production continues to recover after a turbulent summer with port blockades and severely curtailed production. Libya’s production rose by 103,000 bpd to average 1.053 million bpd, as per secondary sources. Angola and Nigeria also contributed to the cartel’s higher production.

OPEC’s efforts to boost supply were helped by its key partner in the deal with the non-OPEC nations—Russia. Production in Russia hit a post-Soviet record at 11.54 million bpd in September, up by 150,000 bpd from August, OPEC said, citing preliminary estimates.

By Tsvetana Paraskova for Oilprice.com