By John Ikani
Libya’s oil production came to a complete halt last month, while Iraq’s adherence to OPEC’s output limits led to a collective drop of roughly 500,000 barrels per day (bpd) in output from the OPEC+ coalition, according to the latest Platts survey from S&P Global Commodity Insights.
In September, the OPEC+ group managed to produce 40.23 million bpd, marking a decline from August’s figures.
Despite this drop, several producers under the OPEC+ agreements continued to exceed their quotas, although the surplus was smaller than in previous months.
Producers with output restrictions were 232,000 bpd above their total quota last month, a decrease from the excess of 327,000 bpd seen in August.
The decline in overall output was largely driven by the cessation of oil production in Libya and Iraq’s efforts to align with OPEC+ agreements.
The political crisis in Libya resulted in the suspension of production, while Iraq, traditionally the biggest overproducer, is reportedly reducing its output but still exceeds its assigned limits.
As part of ongoing commitments, Iraq, along with Russia and Kazakhstan, has agreed to compensate for earlier overproduction with further cuts later this year and into 2025.
According to a separate survey, Iraq was still producing 90,000 bpd more than its quota in September, signalling that while compliance is improving, it has not yet reached full adherence.
OPEC’s total output for September dropped to 26.14 million bpd, the lowest level recorded in 2023, primarily attributed to the disruptions in Libya.
The North African nation is usually exempt from OPEC+ production cuts due to its ongoing political turmoil, which often leads to production halts and port blockades.
The significant drop in output was mainly a result of a leadership dispute concerning the Central Bank of Libya, the sole internationally recognized authority for the country’s oil revenue.
Production in Libya resumed in early October and is reportedly on track to return to levels seen before the recent crisis.
