OPEC pumped the fewest barrels since March 2015 in January, with crude output plunging to 30.86 million b/d, a fall of 970,000 b/d from December as new supply quotas went into force, according to an S&P Global Platts survey of industry officials, analysts and shipping data. The month-on-month fall was the biggest since December 2016, the survey found, with Saudi Arabia and the UAE leading the group in production discipline, while Libya kept its largest oil field offline due to security risks.
The 11 OPEC members obligated to reduce oil output under the agreement signed late last year achieved 76% of their required cuts in January, with their production falling 619,000 b/d from October, the benchmark month from which the quotas were determined, except for Kuwait, which is using November. At the last OPEC meeting in Vienna, the members agreed to slash output by 812,000 b/d, with Russia and nine other non-OPEC allies committing to a cut of 383,000 b/d for the first six months of 2019.
Venezuela, Iran and Libya were exempted from the deal, and those three countries contributed to 25% of OPEC’s production decline for January. Saudi Arabia has backed up the strong words of its energy minister Khalid al-Falih, with January production falling to 10.21 million b/d. That is below its allocation of 10.31 million b/d under the deal, as crude exports declined by around 500,000 b/d to 7.20 million b/d in January, Platts trade flow software cFlow showed.
It is also the lowest output figure since May 2018 when the kingdom produced 10.01 million b/d. The UAE, which has recently emerged as OPEC’s third-largest producer, pumped 3.07 million b/d in January, down 180,000 b/d from December, in line with its quota. State-owned ADNOC lowered January nominations by 5-15% for its key crude export grades and this was matched by lower loadings in the month, according to tanker tracking data.