Disruptions in crude oil production from African producers such as Nigeria and Libya caused the decline in production from the Organisation of the Petroleum Exporting Countries (OPEC) last month, making them the oil cartel’s weakest supply link, even as the ambitious plans of Iraq, its second-largest producer, to expand exports are facing headwinds, a Reuters survey found.
Supply from OPEC in June averaged 30.38 million barrels per day (mbpd), down from a revised 30.46 mbpd in May, the survey of shipping data and sources at oil firms, OPEC and consultants found.
OPEC’s June output is the lowest since March 2013, when the group pumped 30.18 mbpd, according to Reuters surveys, and leaves supply a mere 380,000 bpd above its output target of 30 mbpd.
In June, largely involuntary curbs by smaller OPEC producers have outweighed extra crude from its top exporter, Saudi Arabia, which has ramped up supply in response to a seasonally higher requirement for crude in domestic power plants.
“It’s Nigeria, Libya and Angola mainly,” said a participant in the survey who declined to be identified, according to Oil and Gas News. “This decline should support prices and you could make a case for it continuing for the next few months.”
The most notable drop in OPEC output has come from Libya. Protests at oil fields and terminals led to supply falling below 1 mbpd earlier in June, according to the state oil company, although production recovered later in the month.
Supply in Nigeria, increasingly disrupted by oil spills, flooding and theft, remains under downward pressure. Output of Nigerian Usan crude, originally expected to amount to four cargoes in June, was offline for most of the month.
The Usan operator, Total, declared a force majeure on loadings which is still in place. Another Nigerian crude grade, Bonny Light, remains under force majeure, no thanks to the row between Nigeria LNG Limited and the Nigerian Maritime Administration and Safety Agency.
Iraq’s exports have slipped to 2.35 mbpd so far in June due to poor weather disrupting loadings in the south and interruptions to pipeline flow in the north of the country, according to shipping data and industry sources.
Supply fell in Angola due to export scheduling. Shipments of grades including Saxi and Plutonio crude were lower than in May, when exports rose.
Information from Business Day was used in this report.