Opec+ issues August, September quotas

The Opec+ coalition's two largest producers, Saudi Arabia and Russia, can raise crude output to 9.6mn b/d in August and 9.704mn b/d in September, according to quotas seen by Argus .

Both countries can lift production by just over 100,000 b/d in each of the two months, as outlined in an Opec+ internal document (see table for full August and September group quotas).

This follows the 18 July approval by Opec+ for a collective 400,000 b/d output increase in each month of the August 2021-April 2022 period, and then of a rise of around 432,000 b/d from May next year until the group's cuts are unwound by the end of 2022. This includes a three-month window in which the group can pause these increases in response to any change in the fundamental outlook.

As of next May, the baseline levels that determine individual countries' output targets and compliance will be raised for five participants — the UAE, Saudi Arabia, Russia, Iraq and Kuwait.

Opec+ will hold regular ministerial meetings that will approve or adjust the 400,000 b/d monthly rises, and will meet on 1 September to decide quotas beyond that month, a delegate said.

The latest Opec+ policy was agreed following a two-week impasse, leaving deal participants with just under two weeks to adjust their August export or refinery-use programmes to accommodate the higher output. But the small pro-rata distribution of the increase will probably see some of the additional crude head into storage. More than half of the deal's participants will raise production by or under 10,000 b/d next month — not enough to accumulate a standard-size 600,000 bl export cargo. Mideast Gulf producers had allocated their August-loading supplies in the first half of July, although Russia's more-prompt loading schedule releases may have allowed for higher output to be reflected in exports. A loading programme circulated today shows exports of Urals and Siberian Light crude higher by 8pc on the month in August.

Saudi Arabia faces sharply higher crude-burn requirements to meet air conditioning needs in the summer moths. Riyadh saw its highest level of direct crude burn of 2020, at 702,000 b/d, in August, according to the Joint Organisations Data Initiative (Jodi).

By Ruxandra Iordache

Opec+ quotas mn b/d Country Baseline July target August target September target Saudi Arabia 11.000 9.495 9.600 9.704 Iraq 4.653 4.016 4.061 4.105 Kuwait 2.809 2.425 2.451 2.478 UAE 3.168 2.735 2.765 2.795 Algeria 1.057 0.912 0.922 0.932 Nigeria 1.829 1.579 1.596 1.614 Angola 1.528 1.319 1.333 1.348 Congo (Brazzaville) 0.325 0.281 0.284 0.287 Gabon 0.187 0.161 0.163 0.165 Equatorial Guinea 0.127 0.110 0.111 0.112 Opec total 26.683 23.033 23.286 23.540 Russia 11.000 9.495 9.600 9.704 Mexico 1.753 1.753 1.753 1.753 Oman 0.883 0.762 0.771 0.779 Azerbaijan 0.718 0.620 0.627 0.633 Kazakhstan 1.709 1.475 1.491 1.508 Malaysia 0.595 0.514 0.519 0.525 Bahrain 0.205 0.177 0.179 0.181 Brunei 0.102 0.088 0.089 0.090 Sudan 0.075 0.065 0.065 0.066 South Sudan 0.130 0.112 0.113 0.115 Non-Opec total 17.170 13.308 13.454 13.601 Opec+ total 43.853 36.341 36.740 37.141 Source: OPEC document *Iran, Libya and Venezuela are exempted from cuts under the current deal

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