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  • OPEC & Its Alliances Compliance On Oil Production Pact Falls To 99 Percent

OPEC & Its Alliances Compliance On Oil Production Pact Falls To 99 Percent
Oil & Gas | 23 January 2021

The Compliance of OPEC+ with oil production cuts in December 2020 reached 99%, which was slightly lower as compared to November’s compliance of 101%, sources of the OPEC+ group told Reuters on Thursday. 

The technical & ministerial committee meetings of the OPEC+ alliance will be organized in early February to discuss the compliance and the current state of the oil market, and the final compliance figure of December could change to some extent before that, one of the sources from the group mentioned.

A tanker tracking firm Petro-Logistics, earlier this month, opinionated that the compliance of the OPEC+ group with the oil production cuts dropped to 75% in December 2020 which was one of the lowest recorded levels since the pact was authorized on May 2020. They even estimated that Saudi Arabia, the leader of OPEC and the world’s leading oil exporter, saw its compliance decrease by 10 percentage points to 92 percent last month.

The part of ten OPEC members of the OPEC+ pact complied at 82% with the production cuts in December, signifying the fall of the compliance by 10% per month, while the nine non-OPEC producers in the pact had a lower compliance rate of 64% in December, reflecting the drop of their compliance by 8% per month, according to the tanker-tracking firm. 

In Cartel’s Monthly Oil Market Report published last week, the Crude production alone from OPEC, recorded an average of 25.36 million barrels per day (BPD) in December 2020, rising by 280,000 BPD as compared to November.

Furthermore, Libya, an exempted country from the OPEC+ cuts, increased its oil production to 1.22 million BPD, and Libyan crude increased by 136,000 BPD in December compared to November, according to OPEC’s secondary sources. Even oil production in Iraq increased by 76,000 BPD to 3.848 million BPD. Iraq, being OPEC’s second-largest producer has pledged persistently to compensate for its lack of compliance by cutting more output in the initial months of the OPEC+ pact.

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