02 October 2018, London — Organization of Petroleum Exporting Countries, OPEC, production rose last month as deepening losses in Iran due to looming U.S. sanctions were countered by other members.
The group’s 15 nations pumped 32.83 million barrels a day in September, 30,000 more than the month before, according to a Bloomberg survey of officials, analysts and ship-tracking data. Even though Iranian production fell by 140,000 barrels a day to 3.36 million — the lowest since early 2016 — Saudi Arabia, Angola, and Libya offset the losses.
Iran’s decline is expected to accelerate once sanctions formally begin in November. Major buyers of the country’s crude have already started to diversify their supplies. India was said to plan no purchases of Iranian crude in November, according to officials at the largest state-run refiners. That followed similar moves by South Korea and Japan.
The Middle Eastern nation’s shipments of crude have fallen 1.1 million barrels a day, or 39 percent, since April, according to tanker tracking data compiled by Bloomberg. That outpaces the 11 percent drop in production over the same period. The tracked shipments exclude volumes held on tankers that remain close to Iran’s export terminals after the nation resorted to storing some of its barrels at sea last month.
Combined with deepening losses in Venezuela due to an economic crisis, the U.S. sanctions on Iran have propelled crude prices to a three-year high above $80 a barrel in London. While the rally has prompted President Donald Trump to demand the rest of the Organization of Petroleum Exporting Countries open the taps, they’ve been cautious so far.
Although Saudi Arabia, the most powerful OPEC member, has promised to fill any shortages, it’s taking a gradual approach. The kingdom raised output by 80,000 barrels a day to 10.53 million, according to the survey.
Angola, which has been ramping up the Kaombo project operated by Total SA, pumped an extra 90,000 barrels a day. Nigeria and Libya also revived some output halted earlier by internal strife.
Russia, which has partnered with OPEC in a grand coalition established in late 2016, is also pushing ahead with production increases. At one point last month, its output jumped as high as 11.36 million barrels a day, a post-Soviet record, according to a government official. That means the country has fully reversed the cutbacks it implemented with OPEC last year and is boosting output even further.