OPEC oil production declines before the new cuts take effect

OPEC oil production fell last month as a result of modest cuts in Iran, Iraq and Nigeria.

OPEC production fell by 140,000 barrels per day, reaching just over 28 million barrels per day, according to a Bloomberg poll. Nigeria and Iraq saw the largest cuts, each reducing production by about 50,000 barrels per day.

Production is likely to decline further next month, as the group and its allies will begin new supply cuts approaching 900,000 barrels per day, the quantities announced at the end of an online meeting last Thursday.

Oil prices

Oil prices fell after the agreement, as traders remained skeptical that OPEC and its allies - which had already cut production significantly over the past year - were fully prepared to reduce supplies further. Consulting firm Vanda Insights described the move as a confusing and tangled mess due to a lack of details.

Oil prices fall for the sixth week amid fears of abundant supplies

Saudi Arabia, the group's leader, pledged to maintain production near current levels of approximately 9 million barrels per day during the first quarter of next year, but did not pledge any additional cuts.

Before it was held on Thursday, the OPEC+ meeting was postponed for 4 days, as the alliance faced the difficulty of resolving the dispute over reducing the 2024 production quotas for the two African member countries, Angola and Nigeria.

Production ceiling

According to a final agreement, Lagos received a maximum of 1.5 million barrels per day that will come into effect next January. A Bloomberg survey indicates that it pumped 1.44 million barrels per day last November, which leaves room to increase production early next year.

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However, Angola failed to convince the group of producing countries that there was justification for a production target exceeding 1.1 million barrels per day, as its production capacity had deteriorated after many years of lack of investment.

Estevao Pedro, the coordination official with the coalition, rejected the production ceiling and said that the country would maintain a production level close to 1.18 million barrels per day. Despite this, a Bloomberg survey estimated Angola's production at 1.14 million barrels per day last November, making it close to the target set by the OPEC+ alliance.

Iraq and Iran

Iraq's production fell to 4.29 million barrels per day during October, as Baghdad faces difficulty in restarting the export pipeline that was stopped last March in light of a dispute with the Kurdish region and neighboring Turkey.

Iran suffered the second largest decline, as its production fell by 40,000 barrels per day to 3.07 million barrels per day, according to the survey. Despite this, Iranian production remains near its highest levels in 5 years, as the United States, keen to rein in fuel prices, adopts a more flexible stance on the country's oil sales to China.