OPEC oil output falls on Saudi cut, Nigerian outage, Reuters survey finds

OPEC oil output has fallen in July after Saudi Arabia made an additional voluntary cut as part of the OPEC+ producer group’s latest agreement to support the market and an outage curbed Nigerian supply, a Reuters survey found on Monday. However repair work on Nigeria’s suspended Forcados crude oil terminal is expected to be complete by early next week. The Organisation of the Petroleum Exporting Countries has pumped 27.34 million barrels per day (bpd) this month, the survey found, down 840,000 bpd from June. That’s the lowest since September 2021 according to Reuters surveys. Saudi Arabia pledged to cut output by 1 million bpd in July as part of OPEC+’s deal in June which limits supply into 2024. Oil has begun to rally in response, with Brent crude trading above $85 a barrel, up from near $71 in late June.

The Saudi move, which Energy Minister Prince Abdulaziz bin Salman called a “Saudi lollipop,” came on to top of earlier voluntary cuts that Riyadh and several other members of OPEC+ had announced, and added to reductions made under a late 2022 OPEC+ agreement. Increases in Angola and Iraq due to higher exports limited the decline in OPEC output in July, the survey found. OPEC’s output is still undershooting the targeted amount by almost 1 million bpd partly because Nigeria and Angola lack the capacity to pump as much as their agreed level. Saudi Arabia lowered output by 860,000 bpd month-on-month, the survey found. Figures from Kpler show crude exports down over 600,000 bpd month-on-month, although another tanker tracker found a smaller export decline. 

The second-biggest decline was in Nigeria where Shell suspended loadings of Forcados crude due to a potential leak at the export terminal. Libyan output edged lower due to a brief stoppage at some fields due to a protest. The Reuters survey aims to track supply to the market. It is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from companies that track flows such as Petro-Logistics and Kpler, and information provided by sources at oil companies, OPEC and consultants. Repair work on Nigeria’s suspended Forcados crude oil terminal is expected to be complete by early next week, a shipping source told Reuters. Shell suspended loadings of the medium sweet grade over two weeks ago, citing a potential leak at the export terminal.

Sources had told Reuters that exports of the grade – which was scheduled to ship 220,000 barrels per day (bpd) in July – were halted on July 12 evening after workers saw fumes near the single buoy mooring that was loading oil onto a vessel. Shell confirmed that injections into the terminal had been curtailed, following the report of some sheen in the mooring vicinity on the day, and that investigations were underway. However, no force majeure has been declared. Shell on Monday did not comment on the Reuters report. The suspension of Forcados loadings contributed to Nigeria becoming the second leading contributor to the fall in OPEC crude oil output in July, a Reuters survey showed on Monday. Nigeria’s July output dropped by 120,000 barrels per day (bpd) versus the previous month, of the total 840,000 bpd, a fall largely driven by Saudi Arabia.