Saudi Arabia and the United Arab Emirates as part of the OPEC+ pact led to a 790,000-barrel-per-day rise in global oil production in August, the International Energy Agency (IEA) said in its closely-watched Oil Market Report on Wednesday. 

Production gains were partially offset by losses in OPEC member Nigeria—the biggest laggard in the OPEC+ deal – as well as lower output in the non-OPEC members of the OPEC+ alliance, Kazakhstan and Russia, the IEA said.

Growth in production is expected to slow toward the end of this year, edging up by just 280,000 bpd from August through December to 101.6 million bpd. Global oil production is forecast to rise by 4.8 million bpd this year, to an average of 100.1 million bpd. Next year, production is expected to grow by 1.7 million bpd to 101.8 million bpd, the IEA said.

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In August, Libya’s oil production rebounded to 1.211 million bpd, according to the country’s National Oil Corporation (NOC)—a level last seen before the port blockades that began this spring. Libya’s oil production has been recovering ever since the blockade was lifted in the middle of July.

At the other end of the supply spectrum, crude oil exports out of Nigeria plunged to below 1 million bpd, their lowest level on record, last month, oil export analytics firm Petro-Logistics said earlier this week.
The monthly report from the Paris-based agency showed still very resilient Russian oil exports, but flagged major losses in just a few months’ time when the EU embargo on seaborne oil imports from Russia enters into full force early next year.

Russian total oil exports actually rose by 220,000 bpd in August to 7.6 million bpd, which is down by just 390,000 bpd from pre-war levels.

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However, the EU embargo on Russian crude oil and product imports that comes into effect in December 2022 and February 2023, respectively, is expected to result in deeper declines as an additional 1 million bpd of products and 1.4 million bpd of crude will have to find new homes, the IEA said. 

“Russian total oil production is forecast to decline to 9.5 mb/d by February 2023, a 1.9 mb/d drop compared to February 2022,” the agency said.

By Michael Kern

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