In a decisive move last month, OPEC scaled back its oil production, aiming to curb a global surplus and stabilize prices.
This decision saw a significant decrease of 490,000 barrels per day, bringing the output to 26.57 million barrels daily.
Notably, Iraq and Kuwait were major contributors to this reduction. Yet, the actual impact of these cuts was less than the headline figure suggested.
Unplanned disruptions in Libya, not part of the intended cuts, accounted for a significant portion of the decrease.
Moreover, overall production exceeded the set limits, with Iraq and the UAE overshooting their quotas.
Under Saudi Arabia’s leadership, OPEC and its allies are cutting production further this quarter.
This comes as global oil demand growth slows, and the U.S. continues to ramp up its supply.
Despite ongoing Middle Eastern conflicts and threats to Red Sea shipping, oil prices have hovered around $80 per barrel in London, lower than the rates following Hamas’s October 7 attack on Israel.
The Bloomberg survey indicated Kuwait and Algeria fully implemented their reduction commitments. Iraq also made notable progress, albeit remaining above its quota.
Libya’s output fell sharply due to protests shutting down its largest oil field.
The broader OPEC+ coalition, including Russia and Kazakhstan, showed mixed compliance with new limits.
Russia’s early January crude exports dropped significantly while its refined fuel shipments surged, highlighting the complexity of enforcing production caps.
OPEC+ reviewed its market strategy without adjustments, hinting at possible extensions into the next quarter. Riyadh expressed openness to continuing these measures.
OPEC and its allies strategically balance global oil supply and demand, impacting economies and energy markets worldwide.