OPEC Meeting Looms as Oil Production Drops in April

OPEC reports a in crude oil production of 48,000 bpd decrease in April, ahead of the OPEC+ meeting on future production levels.

In its latest monthly report, OPEC revealed a decrease in crude oil production of 48,000 barrels per day (bpd) in April compared to March. This reduction comes just two weeks before the pivotal meeting where the broader OPEC+ group will decide on production levels beyond June.

According to the report, the total crude oil production of all 12 OPEC members averaged 26.58 million bpd in April. The decline was primarily attributed to decreased output in Nigeria and Iraq, as well as in Venezuela, which is exempt from the OPEC+ quotas. Conversely, Iran, which is also exempt from these cuts, increased its oil production during the same period.

The report also highlighted that non-OPEC countries within the OPEC+ alliance, referred to as the Declaration of Cooperation (DoC), saw a more significant drop in production. Their combined output fell by 198,000 bpd to 14.44 million bpd in April. This information reflects OPEC’s newly expanded reporting approach, which now includes detailed data on DoC demand and supply.

In a notable shift, the latest Monthly Oil Market Report (MOMR) from OPEC emphasized that future reports will focus on the “demand for DoC crude” rather than the traditional “demand for OPEC crude.” OPEC explained that this change aims to underscore its commitment to the OPEC+ alliance and ensure a clear understanding of the market’s supply dynamics.

“This relevant and appropriate improvement not only demonstrates solidarity and unity within the DoC framework, which is now in its eighth year, but also helps eliminate the potential for misunderstanding and/or misinterpretations,” OPEC stated in the report.

Among the OPEC members, Saudi Arabia, the top producer, maintained its output at around 9 million bpd, adhering to its pledge. Iraq, the second-largest producer in the organization, saw its production decrease by 32,000 bpd in April as it worked to compensate for previous overproduction.

On the non-OPEC side, Russia experienced a substantial drop in crude oil output, with a reduction of 154,000 bpd in April. This decline was attributed to diminished refining capacity following attacks on Russian refineries by Ukrainian forces.

The upcoming OPEC+ meeting is poised to be a critical juncture for the organization and its allies. With the global oil market remaining volatile, the decisions made at this meeting will likely have significant implications for future production levels and the overall balance of supply and demand.

The report’s emphasis on “demand for DoC crude” reflects a strategic move to present a unified front within the OPEC+ framework. As the alliance enters its eighth year, the ongoing cooperation and adjustments in reporting and production underscore the collective efforts to manage global oil supplies effectively.

In summary, OPEC’s April report highlights a modest decline in its overall crude oil production, with notable reductions among some member and non-member countries. The forthcoming OPEC+ meeting will be closely watched as the group navigates the complexities of global oil market dynamics and seeks to maintain stability in production and pricing.