Failure by a number of states to comply with the terms of the OPEC + deal could lead to more than 2 million barrels of surplus oil on the market in the next six months, analysts calculated for Izvestia.
OPEC + exporters have complied with their agreement to cut production in December by only 75%, according to data from the tanker-tracking company Petro-Logistics. This marks one of the lowest compliance rates since the deal began in May 2020.
Among the most likely violators in 2021 are the same countries that did not fully comply with the OPEC + agreement in 2020, said Anna Bodrova, senior analyst at IAC Alpari.
“The most likely violation of the terms of the deal by Iraq, Nigeria, South Sudan. There may be non-compliance with the terms and Equatorial Guinea and Congo, but their share of participation is so small that it will not affect the structure of the transaction, ”the analyst said.
The UAE may also be dissatisfied, which at some point even threatened (albeit unofficially) to withdraw from the deal if the lagging cartel members did not compensate for their lag, added Dmitry Koptev, a member of the expert council of the Institute for the Development of Fuel and Energy Technologies (IRTTEK).
In total, these countries can monthly supply more than 2 million barrels per day to the market above quotas, according to QBF analyst Mikhail Bugaev. For example, Iraq and Nigeria in July violated the terms of the OPEC + deal by 851 thousand and 315 thousand barrels per day, respectively. The UAE is capable of producing over 3.4 million with a quota of about 2.6 million, he said.
Russia will continue to comply with the terms of the OPEC + deal, the office of Deputy Prime Minister Alexander Novak told Izvestia.
Read more in the exclusive material from Izvestia:
Hard production: there may be more than 2 million barrels of excess oil on the market