Opec crude oil output hit an eight-year low in July as a larger voluntary cut by Saudi Arabia deepened losses caused by U.S. sanctions on Iran and outages elsewhere in the group, a Reuters survey found.
The 14-member cartel pumped 29.42 million barrels per day (Mmbpd) last month, the survey showed, down 280,000 Bpd from June’s revised figure and the lowest Opec total since 2011, Kallanish Energy learns.
The survey indicates Saudi Arabia is maintaining its plan of voluntarily restraining output by more than called for as part of the Opec+ agreement.
Despite lower Opec supplies, crude oil has fallen from a 2019 high above $75 a barrel in April, to roughly $65/Bbl, weighed down by concern about slowing economic growth.
Opec+, which includes most Opec members, along with non-Opec producers led by Russia, agreed in December to reduce supply by 1.2 Mmbpd beginning Jan. 1, 2019. Opec’s share of the cut is 800,000 Bpd, to be delivered by 11 members and exempting Iran, Libya and Venezuela.
In July, the 11 OPEC members bound by the agreement, which now runs until March 2020, achieved 163% of pledged cuts, the Reuters survey found. All three exempt producers also pumped less oil.
The biggest supply drop came from Saudi Arabia, which has cut supply even further below its Opec target to try to reduce oil inventories. The survey pegged Saudi production at 9.65 Mmbpd, down from its quota of 10.31 Mmbpd.
The U.S. re-imposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and six world powers. In a bid to cut Iran’s sales to zero, Washington in May ended sanctions waivers for importers of Iranian oil.
Iran’s crude exports declined to as little as 100,000 Bpd in July, according to tanker data and an industry source, from more than 2.5 Mmbpd in April 2018, Reuters reported.
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