OPEC Oil Production Drops to Lowest Level Since January

A Reuters survey revealed on Monday that OPEC's oil production declined in August to its lowest level since January, exacerbated by unrest in Libya that disrupted supplies and ongoing voluntary cuts by other members and the broader OPEC+ alliance.

The Organization of the Petroleum Exporting Countries produced 26.36 million barrels per day last month, a decrease of 340,000 bpd from July, according to the survey. This marks the lowest production since January 2024, as per Reuters surveys.

Libya's reduced exports and production, due to a political standoff over control of the central bank, have contributed to rising oil prices. This has also heightened the likelihood of OPEC+ implementing a planned output increase starting October. Libya experienced the most significant supply loss last month, with a reduction of 290,000 bpd, the survey indicated.

Production disruptions occurred at the Sharara field early in the month and at several other fields towards the end, resulting in an average output of 900,000 bpd. Some data, like that from Kpler, showed minimal impact on Libyan exports in August, though the survey sources estimated a more substantial production impact.

Libya is exempt from OPEC+ production limits. Other reductions included Iraq, which reduced exports in August and aims to improve compliance with its OPEC target, and Iran, which is also exempt from these agreements. Despite ongoing U.S. sanctions, Iran has been increasing its exports over the past few years and is currently producing near its highest levels since 2018.

Among countries with increased output, Nigeria saw a slight boost in exports, according to the survey. OPEC's production exceeded the implied target by about 220,000 bpd for the nine members subject to supply cut agreements, with Iraq largely contributing to this excess.

The Reuters survey tracks market supply using shipping data from external sources, LSEG flows data, information from companies like Kpler and Petro-Logistics, and insights from sources within oil companies, OPEC, and consultants.