OPEC+ exports indicate slow start to new oil cuts, Kpler says

OPEC+ appears to be making a slow start to its new oil output cuts, according Kpler Ltd.

Key coalition members pledged to reduce supplies by a further 900,000 barrels a day this month to stave off a global surplus. Oil exports are one indicator of these countries’ progress in implementing their cuts, and so far in January overall shipments have remained broadly unchanged, according to data from the Vienna-based market-intelligence firm. 

“All in all, the new OPEC+ production quotas are having a minimal impact on actual crude that’s in the markets,” said Viktor Katona, Kpler’s head crude analyst. 

Actual production figures may present a different picture when they emerge later this week, but for now the export numbers do little to shore up fragile sentiment in world oil markets. Crude has made limited gains this year as plentiful US shale output tempers fears over conflict in the Middle East, with prices near $84 a barrel in London on Monday. 

Exports from the seven OPEC+ members engaged in new cuts have averaged about 15.4 million barrels a day so far this month, barely changed from December, Kpler estimates. It’s a similar picture from the wider alliance, with shipments steady at roughly 28.1 million barrels a day.

The figures include both crude oil and refined products from Russia, as the country’s stipulated cutbacks are spread between the two categories. 

Kuwait and Oman cut exports significantly in January, yet Russia, Kazakhstan and Iraq made only modest reductions, according to Kpler’s estimates. Moscow has had more crude available for sale overseas as a result of disruptions at several domestic refineries, the firm said. 

The United Arab Emirates, which was permitted a slight production increase under the terms of the latest OPEC+ agreement, bolstered shipments considerably, according to Kpler. Flows have climbed by about 350,000 barrels a day to average 3.1 million a day. 

Saudi Arabia, the largest crude producer in OPEC+, isn’t required to make any additional cuts in January as part of the group’s agreement.

The Organization of Petroleum Exporting Countries and its partners are due to hold an online monitoring meeting on Thursday. Delegates have said they won’t make any changes to the current agreement, which runs until the end of this quarter, at the session.