The volume of the OPEC production has reached the record rates because of Iraq and Libya
Reuters reported that the production of the OPEC cartel could reach an unprecedented figure in September. This can happen due to the growth of Iraqi exports to the neighboring northern countries as well as through three main Libyan oil terminals that started to work again.
The member states of the cartel have raised the oil production, despite the fact that production volumes from Saudi Arabia have fallen. The rise has happened in spite of the fact that an agreement on the oil production restriction among the members of the cartel had been reached for the first time over 8 years.
According to the survey, the volume of OPEC exports of raw materials has increased to 33.6 million barrels per day in relation to the August 33.53 million barrels per day. These data refer to the first month of the autumn.
The data on the growth of the OPEC production volumes may raise doubts regarding the possibilities of the cartel to act in accordance with the accepted agreements, that is to control the oil production, keeping it within 32,5-33 million barrels per day. A detailed discussion of the agreement among the OPEC members will be held at the November summit in Vienna. Oil quotes soared to $ 50 a barrel on Thursday.
Bjarne Schieldrop, chief commodity analyst at SEB, said: “Despite reaching an agreement to limit the oil production, we’ll have the difficult negotiations on the establishment of quotas for each country.”
“Now, when the OPEC is close to limit the production for the first time over eight years, oil futures for Brent crude oil cannot even cross the mark of $ 50 per barrel. Anyway, now, “- he added.
At the end of the last week, quotes for Brent dropped again – to $ 49 per barrel. On Monday the price has reached $ 50.04 figure.
Oil production has been increasing since 2014. This has happened due to the fact that Saudi Arabia, Iraq and Iran increased the production and the cartel stopped setting an upper limit of the production in order to increase prices. Indonesia and Gabon have been restored as OPEC members in recent years and it is also favorable for the growth of the cartel production.
The OPEC production in September largely grew due to Iraq and Libya. SOMO, the State Oil Company of Iraq, and the government of semi-autonomous Kurdistan region agreed on joint oil delivery from the Kirkuk field. The export of black gold from Iraq has become equal to 4.43 million barrels per day due to this agreement.
Three Libyan oil terminals, which were previously controlled by militants, began their work again. Thus, the AGOCO, a subsidiary of the National Oil Corporation of Libya, was able to increase the production. The AGOCO mainly operates in the east.
According to sources, the production volumes of Saudi Arabia have declined from highs over the three summer months.
The Iranian oil production is increasing faster than all OPEC members after the sanctions were lifted. In September the pace of Iran’s production growth remained at the same level. Iran has almost approached the pre-sanctions level. At the moment the country needs investments in order to continue to increase the production levels.
Reuters bases its research on the information about the oil shipment, which is provided by different sources as well as on oil flow data and statements of sources in the oil companies, OPEC and consulting agencies.