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Date: 2025-11-28 Page is: DBtxt003.php txt00018607

Energy
Oil Markets ... January 2020

New Decade, New OPEC Oil Curbs. ... Same Mixed Results

Burgess COMMENTARY

Peter Burgess
New Decade, New OPEC Oil Curbs. Same Mixed Results Global oil supply data for January will make for frustrating reading in Saudi Arabia, with the next meeting of the OPEC+ production alliance just weeks away. The world’s biggest crude exporter hinted in December, when the coalition revised the terms of its pact, that other nations should do more to limit a glut. Once again, though, Saudi Arabia did the heaviest lifting by far, while some key allies like Russia and Iraq struggled to comply in full. OPEC+ Countries’ Compliance With Oil-Cuts Agreement in January Percentage of cutback target reached 0 20 40 60 80 100 120 140 160 180 U.A.E. 134/156 86% S. Sudan -3.289999999999992/3 -110% Sudan 3.3599999999999994/4 84% Saudi Arabia 900/489 184% Oman 66.32000000000005/34 195% Nigeria 51/74 69% Malaysia 8.830000000000041/20 44% Kuwait 144/140 103% Kazakhstan -1.1300000000001091/57 -2% Iraq 152/191 80% Gabon -9/8 -113% Eq. Guinea 3/5 60% Congo 32/14 229% Brunei -14.400000000000006/4 -360% Bahrain 3.5/7 50% Azerbaijan 63.299999999999955/27 234% Angola 154/47 328% Algeria 45/44 102% Russia 234.25/300 78% Mexico 31.720000000000027/58 55% Note: Positive numbers over 100 indicate full conformity with pledged cuts. A positive number below 100 indicates cuts, but less than pledged. Negative numbers show production actually increased relative to the baseline. Source: Data compiled by Bloomberg OPEC+ reset the terms of its agreement as of Jan. 1. Half of the 10 OPEC countries now participating in supply cuts conformed last month, for a rate of 138%, according to Bloomberg calculations from the group’s secondary source data. Non-OPEC adherence was 76%, estimates from preliminary International Energy Agency data on crude supply show. Overall, the OPEC+ coalition had a compliance rate of 119%. OPEC+ Supply Cuts Figures are in thousands of barrels a day Country Reference Output Pledged Cut Output Target Jan. 2020 Algeria 1,057 -44 1,013 1,012 Angola 1,528 -47 1,481 1,374 Congo 325 -14 311 293 Eq. Guinea 127 -5 122 124 Gabon 187 -8 179 196 Iraq 4,653 -191 4,462 4,501 Kuwait 2,809 -140 2,669 2,665 Nigeria 1,827 -74 1,753 1,776 Saudi Arabia 10,633 -489 10,144 9,733 U.A.E. 3,168 -156 3,012 3,034 Total OPEC 26,314 -1,168 25,146 24,708 Azerbaijan 725 -27 698 662 Bahrain 206 -7 199 202 Brunei 103 -4 99 117 Kazakhstan 1,689 -57 1,632 1,690 Malaysia 570 -20 550 561 Mexico 1,744 -58 1,686 1,712 Oman 883 -34 849 816 Russia 10,623 -300 10,323 10,389 South Sudan 132 -3 129 135 Sudan 74 -4 70 71 Total Non-OPEC 16,748 -514 16,234 16,356 Total OPEC+ 43,062 -1,682 41,380 41,064 Notes: OPEC and non-OPEC compliance measures crude output. For OPEC supply, Bloomberg uses secondary source data published in the organization’s latest Monthly Oil Market Report. Non-OPEC calculations are based on preliminary data from the International Energy Agency. Reference output levels are primarily from OPEC figures published Jan. 18, 2019. New quotas and targets were established at OPEC+ meetings in December 2019. Output figures and compliance rates may not add up due to rounding. Sources: OPEC, IEA While the cuts have been in place for more than three years, changes were made in January. The alliance pledged to cut by an additional 500,000 barrels a day at a minimum. In addition, Ecuador left the Organization of Petroleum Exporting Countries, and Russia was able to exclude condensate from its crude production, ostensibly making it easier to meet its target. Even though a few major OPEC producers failed to comply, Saudi Arabia, Kuwait and Angola helped push the organization safely into full conformity with the revised agreement. Russia, responsible for more than half of the non-OPEC curbs, missed its target for the sixth month in a row. In fact, just two non-OPEC producers conformed: Azerbaijan and Oman. OPEC members Libya, Iran and Venezuela are exempt. Bloomberg estimates for OPEC+ compliance in 2020 include crude production only. January 2020 Oil Production Thousands of barrels a day Cutback reached target Cutback did not reach target OPEC nations 9,733 Saudi Arabia 4,501 Iraq 3,034 U.A.E. 2,665 Kuwait 1,776 Nigeria 1,374 Angola 1,012 Algeria 293 Congo 196 Gabon 124 Eq. Guinea Non-OPEC nations 10,389 Russia 1,712 Mexico 1,690 Kazakhstan 816 Oman 662 Azerbaijan 561 Malaysia 202 Bahrain 135 S. Sudan 117 Brunei 71 Sudan Sources: OPEC secondary-source estimates of crude output for organization’s members. IEA preliminary estimates of crude supply, excluding condensates, for non-OPEC members. Saudi Arabia agreed to curb by an extra 400,000 barrels a day beyond its pledged cut of 489,000 if others—notably Iraq—also deepened their curbs. In January, the kingdom slashed supply by an average 900,000 barrels daily, though Iraq still failed to reach its target. However, the extra Saudi effort is hardly new: the country exceeded its required cut by at least 400,000 barrels a day in all but three months last year. Bloomberg measures OPEC compliance without the voluntary Saudi curb. By How Much Did Countries Reduce Oil Production? Thousands of barrels a day Target Cutback reached target Cutback did not reach target OPEC nations Saudi Arabia −489 −900 Angola −47 −154 Iraq −191 −152 Kuwait −140 −144 U.A.E. −156 −134 Nigeria −74 −51 Algeria −44 −45 Congo −14 −32 Eq. Guinea −5 −3 Gabon −8 +9 Non-OPEC nations Russia −300 −234 Oman −34 −66 Azerbaijan −27 −63 Mexico −58 −32 Malaysia −20 −9 Bahrain −7 −4 Sudan −4 −3 Kazakhstan −57 +1 S. Sudan −3 +3 Brunei −4 +14 Sources: Bloomberg, IEA estimates of total oil supply for non-OPEC nations; OPEC secondary-source estimates on crude output. In recent years, OPEC+ has been forced to contend with rising American production and a trade war between the U.S. and China, both of which weighed on crude prices. Now there’s a third threat: the coronavirus outbreak, which has killed thousands in China while bringing the country to a halt. Chinese demand for oil products is likely to plunge by more than 35% year-on-year in the first quarter, Morgan Stanley said in a recent report, citing data from researchers at China oil giant CNPC. Note: OPEC output includes all members; Brent price as of Feb. 24, 2020 Sources: Bloomberg, ICE Futures Europe, U.S. Energy Information Administration The next OPEC+ gathering, on March 5-6 in Vienna, is among the most anticipated in years. For weeks, there was speculation that the coalition’s ministers would hold an emergency meeting to address the coronavirus threat. Such a gathering never happened. In addition, Russia, one of the two powerhouses behind the pact, has increasingly seemed to distance itself from the group—if compliance is anything to judge by. Source: Data compiled by Bloomberg With assistance from: Ronan Martin and Grant Smith Additional work by: Brittany Harris Editor: Alaric Nightingale
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