In April, OPEC‘s oil supply reached a low level of four years and a Reuters poll was found, due to the involuntary decline of sanctions hit by Iran and Venezuela, as well as manufacturing restrictions from the leading exporter, Saudi Arabia.
Only this month, the 14-member Petroleum Exporting Countries pumped 30.23 million barrels a day (bpd) and the reuters survey showed below 90,000 bpd by March and the lowest total OPEC since 2015.
The poll suggests that Saudi Arabia and its Gulf allies are holding larger supply cuts than required by the latest OPEC agreement, avoiding pressure from US President Donald Trump. On Friday, Trump said he had called OPEC to tell the group the lowest prices.
Crude oil trades over $ 73 a barrel and hit a six-month increase over $ 75 last week driven by Saudi’s supply constraints and restrictions on Venezuela and Iran facing US sanctions restricting their exports.
Swiss banker Norbert reucker Julius Baer said that “Iranian sanctions come to the fore of the already fragile supplies and raise concerns about tightening the markets.”
OPEC, Russia and other non-members, an alliance known as OPEC +, agreed in December to reduce supply by 1.2 million bpd from January 1st. The share of OPEC in the cut is 800,000 bpd, to be delivered by 11 members – Libya and Venezuela.
In April, 11 OPEC-related members reached 132% of promised cuts, the study found, compared to 145% in March, due to the highest output in Nigeria and small increases in Saudi Arabia and Iraq .
Decrease of OPEC oil supply – promised against delivery – April 2019.
The latest OPEC agreement came only months after the group agreed to pump more oil, which on the other hand partially disintegrated their original supply restriction agreement, which came into force in 2017.
Iran declined the largest drop in OPEC’s supply this month by 150,000 bpd, the survey was uncovered. The lowest supply in two of the freed producers, Iran and Venezuela, has exceeded the other profits.
Iran’s raw exports fell in April at their lowest daily level this year, suggesting buyers are curbing purchases before Washington extends further to Iranian shipments as expected next month.
The United States decided last week not to renew the exemptions from sanctions against Iran given last year to Iranian oil buyers, taking a tougher line than expected. As a result, Iranian exports are expected to fall further in May.
In Venezuela, supply fell by 100,000 bpd due to the impact of US sanctions on the state-owned oil company PDVSA and was a long-term decline in output, according to the survey. Venezuela was once the highest producer of OPEC.
Saudi Arabia’s main exporter raised a slight increase in April from March, though Riyad continued to yield larger cuts than required in the supply agreement, as did the allies of the United Arab Emirates and Kuwait.
Saudi Arabia has said it will replace losses in Iran and Venezuela, but it is prudent to pump more if there is no consumer demand. Energy Minister Khalid al-Falih on Tuesday said the kingdom would not rush to boost supplies to compensate Iran.
The biggest gain of OPEC production occurred in Nigeria, where Aegina’s Total area has helped increase production. Libya, the third-party manufacturer exempt from carrying out voluntary repression, also boosted production.
Nigeria says the Aegina field produces condensate, a kind of light oil exempt from OPEC cuts. The survey includes the field based on its total list as a crude producer.
In a study, it was learned that smaller manufacturers, Congo, Ecuador and Gabon, also pumped on their targets.
Reuters polls show that April’s production has been the lowest since OPEC since February 2015, excluding membership changes that have occurred since then.
Also this Reuters survey seeks to track market supply and is based on transport data provided by external sources, Eikon Refinishing circulates data and information provided by sources at oil companies, OPEC and consulting firms./Investing.com