OPEC oil production drops to lowest level in four years

According to a Reuters study, crude oil production from OPEC fell to its lowest level in four years last month, largely due to continued decline in Venezuelan production and declining production. in Iran resulting from sanctions imposed by the United States.

The only voluntary reduction in production that contributed to this decline is Saudi Arabia's excessive compliance with the OPEC + Pact of last December and a similar degree of restraint on the part of the neighbors and allies of the Gulf Kingdom.

According to the survey, OPEC members produced 30.23 million bpd in April, a modest decline of 90,000 bpd from March, but its lowest level since the same month in April. 2015.

The combination of the above three factors earlier this month led to soaring oil prices. Brent has surpassed 75 dollars a barrel after the United States announced it would not extend the lifting of sanctions for Iran's biggest oil customers. The effect of this announcement, however, was short-lived and the perception that there was enough oil in the world to fill the void left by Iranian crude put pressure on prices fairly quickly, with Brent moving closer to $ 71 per barrel and WTI under $ 64. after peaking at more than $ 65 per barrel.

The assurances given by Saudi Arabia and the United Arab Emirates that they were prepared to cancel their production cuts to compensate for the loss of supply have made it possible to limit prices, as has the willingness of Iraq to join with them to cancel these reductions.

The increase in oil production in the United States has also contributed to the mixed response of the market to the lifting of sanctions waivers for Iran, and a report from the EIA that production actually declined in February at 11.7 million bpd on average did not change the dominant sentiment of the market. This sentiment was also reinforced by the construction, estimated by the US Petroleum Institute, of crude oil inventories in the United States of about 6.8 million barrels.

By Irina Slav for Oilprice.com

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