Opec+ production lower on fall in Russian output

Opec+ crude production dipped in March on the back of a decline in Russian output, although the drop fell short of the full 500,000 b/d cut pledged by Moscow.

Russian crude production was down only 100,000 b/d on the month in March to 9.7mn b/d, Argus estimates, despite Moscow's high-profile pledge to reduce output by 500,000 b/d. Russia's deputy prime minister Alexander Novak first announced the 500,000 b/d cut on 10 February, but acknowledged on 24 March that the full reduction had yet to be reached. Preliminary indications suggest overall crude exports from Russia were stable last month. A rise in Urals loadings more than offset a drop in shipments through the Druzhba pipeline and reduced ESPO Blend liftings from Kozmino.

Lower Russian output led to a fall in production from the non-Opec contingent of the Opec+ coalition to 13.51mn b/d in March, down by 110,000 b/d compared with February. Production by the 10 Opec countries with quotas was 20,000 b/d higher at 24.49mn b/d as maintenance in Angola and lower production from some other west African members was offset by an increase in Saudi output and an ongoing recovery in Nigerian supply. Opec+ producers with quotas pumped 2.1mn b/d below their combined target last month, with Russia producing around 780,000 b/d under quota and west African member countries making up a large chunk of the remaining shortfall.

In Angola, maintenance at the Dalia floating production, storage and offloading (FPSO) vessel helped push the country's production down to 1mn b/d in March, the lowest in nearly two decades. Output is expected to recover in April, with exports scheduled to rise to 1.1mn b/d following a resumption in Dalia shipments. Nigerian production climbed for a sixth consecutive month to its highest in over a year, helping to narrow the shortfall relative to its target to around 270,000 b/d, from a peak of 780,000 b/d in September last year.

An uptick in exports and higher domestic refinery runs led to a rise in output in Saudi Arabia last month, while Iraqi production edged higher following a fall in February driven by field maintenance and refinery turnarounds. The halt to around 400,000 b/d of exports from the semi-autonomous Kurdistan region from 25 March resulted in some output in northern Iraq being shut in. The Kurdistan Regional Government (KRG) and the federal government in Baghdad struck a deal on 4 April, paving the way for a resumption of crude exports from the region via Turkey's Ceyhan port.

By Denise Albrighton