LONDON – OPEC’s oil production fell significantly in March on the back of Saudi Arabia-led output curbs and outages in Venezuela resulting from political and economic unrest.
In its closely-watched monthly oil market report, the Organization of the Petroleum Exporting Countries said its crude-oil output had fallen by 534,000 barrels a day month-on-month, to average 30.02 million barrels a day in March, according to secondary sources.
The bulk of the cuts were shouldered by Saudi Arabia – the de-facto head of OPEC and the world’s largest exporter of crude – which reduced output by 324,000 barrels a day.
Venezuela, a key member of OPEC whose oil industry has been under US sanctions since the start of the year, saw output decline by 289,000 barrels a day, according to the report.
Late last year, OPEC and a group of 10 producers outside the cartel, led by Russia, agreed to hold back output by a collective 1.2 million barrels a day for the first half of 2019, compared with October 2018 levels.
OPEC member states agreed to cut 800,000 barrels a day of that quota, with Saudi Arabia handling a 250,000-barrel-a-day reduction.
Both Venezuela and Iran – another OPEC member under US oil sanctions – were exempt from the latest production-cut agreement.
However, Russia, OPEC’s main ally outside the cartel, has lagged behind its agreed quota of cutting 230,000 barrels a day.
Preliminary Russian output data for March showed a production decline of 40,000 barrels a day to 11.49 million barrels a day, OPEC said.
Russia and Saudi Arabia are the world’s two biggest oil producers behind the US.
Still, tightening global supply as a result of the OPEC-led cuts and outages in Venezuela and Iran have helped boost oil prices by more than 25 percent since the start of the year.
Brent crude, the global oil benchmark, was trading up 0.64 percent at $71.06 a barrel Wednesday morning, hovering near a five-month high.
Total world oil supply decreased by 140,000 barrels a day in March, month-on-month, to average 99.26 million barrels a day, the OPEC report showed.
Meanwhile, OPEC lowered its world oil-demand growth forecast for this year by 30,000 barrels a day to a growth rate of 1.21 million barrels a day, amid slower global economic growth.
Total world oil demand is now expected to reach 99.91 million barrels a day this year, exceeding the 100 million barrels a day mark in the second half of the year, OPEC said.
OPEC also said that commercial oil stocks in the Organization for Economic Cooperation and Development – a group of industrialized, oil-consuming nations that includes the US – fell by 18.3 million barrels in February to stand at 2.863 billion barrels.
That’s 7.5 million barrels above OPEC’s target of the latest five-year average, and 7 million barrels higher than the same time a year ago.