Extra Saudi cut lifts Opec+ compliance to record in Feb

The Opec+ alliance achieved a record high level of compliance with its collective crude output reduction target in February, according to two Opec+ sources, helped by Saudi Arabia's voluntary pledge for an additional 1mn b/d cut below its formal quota.

Overall Opec+ compliance stood at 113pc in February, up from 103pc in January, the sources said. This is the highest compliance that the group has delivered since the start of the current output restraint agreement in May 2020.

The group's 10 participating Opec countries were 124pc compliant in February — also the highest level since the start of the agreement — up from 108pc in January, while the nine non-Opec participants were 94pc compliant, down from 95pc in the previous month. Non-Opec members' collective compliance has hovered just shy of 100pc in each month since the start of the agreement. They got closest to full compliance in August, when they delivered 99pc of their pledged cuts.

Compliance numbers are preliminary until they are confirmed by the Opec+ group's Joint Ministerial Monitoring Committee (JMMC), which is next scheduled to meet on 31 March ahead of the full Opec+ ministerial meeting on 1 April. The Opec+ Joint Technical Committee (JTC) typically meets before the JMMC to study market conditions.

The Opec+ group calculates its monthly compliance figures by averaging the production estimates of six independent secondary sources, of which Argus is one. Argus estimated group compliance at 114pc in February — 124pc for Opec producers and 95pc for non-Opec.

Those countries that owe compensatory cuts for going over their quotas have exceeded their limits by a cumulative 3.027mn b/d from May last year through February, according to an Opec+ document seen by Argus. This is up from 2.793mn b/d over the May-January period. This figure does not represent a monthly average, but rather the sum of the monthly volumes by which the group's overproducers have surpassed their respective output ceilings. Opec members were responsible for 1.276mn b/d of the cumulative overproduction in May-February, according to the document, and non-Opec countries the remaining 1.751mn b/d, with 46pc of the overall non-Opec figure down to excess production from Russia.

By Ruxandra Iordache and Nader Itayim