Despite production constraints, OPEC’s crude oil production has risen in May because of the exempted countries like Nigeria and Libya.
According to the survey of Bloomberg conducted by analysts and oil companies, Petroleum production of the Organization of Petroleum Exporting Countries (OPEC) reached 32.21 million barrels a day, with an increase of 315,000 barrels a day compared to the previous month. Libya‘s output increased by 210,000 and reached 760,000 barrels per day, while Nigeria‘s production increased by 100,000 and reached a number of 1.7 million per day.
The increase in both countries is caused by the fact that the production fields were reactivated with the decrease of internal conflicts.
OPEC started to imply cut back policy on global inventories at very high levels and is stuck in a region around half of the level in 2014 starting from January 1 2017. Russia decided to extend its production shortfall by nine months to the end of March together with OPEC, as the oil market had not yet resumed its balance.
In fact increases in production in the countries which are exempted from the agreement threaten to reduce the impact of the deal. Libya’s crude oil exports climbed to its highest level in 31 months due to increased production in Sharana, the country’s largest oil field, in May. According to a statement made last week by State Minister for Petroleum Affairs, Emmanuel Ibe Kachikwu, Nigeria hopes to export another 200,000 barrels per day from the Forcados terminal until December.
According to the survey, the 11 countries included in the agreement were in full compliance with the production constraints stated in the agreement, as they were in May and April of the same year. When production of Nigeria and Libya is included, OPEC’s total oil production points out that the agreed tariff on November 30th is over 450,000 barrels per day, which is 66 percent of OPEC’s target. This rate was 90 percent in the previous month.