33.3mbpd sees OPEC production hitting new high in October
THE ORGANISA TION OF PETRO LEUM EXPORT ING Countries’ (OPEC) crude oil production climbed to a new high of 33.33 million barrels per day in October as increases by Saudi Arabia and Libya offset losses stemming from impending U.S. sanctions on Iran, according to a Bloomberg survey of officials, analysts and shiptracking data.
The cartel boosted its output by 430,000 barrels per day, its highest since November 2016, just before the organization implemented production cuts to clear a global glut.
Saudi Arabia, OPEC’s big- gest and most influential member, increased output by 150,000 barrels per day to 10.68 million barrels per day last month, the highest in the Bloomberg data going back to 1962. That’s still below the kingdom’s own estimate of its record output, at 10.72 million barrels per day in November 2016.
An even larger gain was seen last month in Libya, which has overcome political feuds and terrorist attacks to reach the highest output level since 2013. The North African nation increased by 170,000 barrels per day to 1.22 million barrels per day.
Iran, which has seen many buyers flee as U.S. sanctions neared, continued to decline and is producing the least crude since 2016. It slipped by a further 10,000 barrels per day to 3.42 million barrels per day in October, though estimates for September were revised higher. Top importers of Iranian oil, including India, China and Turkey, could not slash their purchases to zero without incurring a significant economic cost. The U.S. pressed these countries, but ultimately had to back down. “We want to achieve maximum pressure but we don’t want to harm frien ds and allies either,” U.S. national security adviser John Bolton said.
The United States is poised to grant waivers to several countries that are unable to cut their imports of Iranian oil to zero, despite the hard stance of zero imports. OPEC’s major ally Russia, is also ramping up again. It hiked production of crude and condensates to a record of almost 11.41 million barrels per day in October, according to an undisclosed government official.
The group is currently in its “produce as much as you can mode,” after it reversed supply cut policies completely, as American sanctions against Iran, which take effect this weekend, are fanning concerns that a shortage could develop before the end of the year.
While the producer group and its partners are boosting supply now, the outlook for next year is growing increasingly uncertain. Also, OPEC committee signaled that producers might need to restrain output in 2019 as faltering economic growth, especially in emerging markets, weakens demand for fuels.
On the other hand, U.S. shale production is continuing to surge as price gains from earlier this year energize shale-oil drillers, threatening to unleash a new surplus. In August, the country overtook Russia as the world’s biggest producer, pumping a record 11.35 million barrels per day, data from the Energy Information Administration (EIA) showed.