Home Business framework OPEC and allies agree to increase oil production amid lagging production

OPEC and allies agree to increase oil production amid lagging production

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In the spring of 2020, at the start of the pandemic, OPEC Plus sharply reduced production by nearly 10 million barrels per day, or nearly 10% of world supply at the time.

Restoring production has not been easy for several countries, including Nigeria and Angola.

In its December monthly oil report, the International Energy Agency estimated that OPEC Plus was below its November target of 650,000 barrels per day, far more than the 400,000 barrels per day it the group had planned to increase each month.

Even Russia, the group’s second largest exporter after Saudi Arabia, appears to have hit a wall at around 9.9 million barrels per day, around 600,000 less than it pumped in April 2020 before the big cuts. and well below Russia’s 10.2 million barrels per day. allocation for next month Saudi Arabia has the same quota. For Russia to grow significantly from here, it will require improved fiscal policies and the development of new areas, analysts said.

“Russia is temporarily close to its limits,” said Bhushan Bahree, executive director of IHS Markit, a research firm.

Nigeria, Africa’s largest producer, in November pumped 360,000 barrels per day below its quota – almost enough on its own to offset the agreed monthly increase of 400,000 barrels per day across the board. of the group. “Poor regulatory framework, sabotage and vandalism of oil installations” discourage necessary spending in Nigeria, the International Energy Agency said in its report.

Angola, another African country, is also pumping well below its quota, while Libyan production recently fell rapidly due to political unrest.