OPEC oil supply sank to a four-year low in March, a Reuters survey found, as top exporter Saudi Arabia over-delivered on the group’s supply-cutting pact while Venezuelan output fell further due to sanctions and power outages.
The 14-member Organisation of the Petroleum Exporting Countries pumped 30.40 million barrels per day (bpd) last month, the survey showed on Monday, down 280,000 bpd from February and the lowest OPEC total since 2015.
The survey suggests that Saudi Arabia and its Gulf allies are pressing ahead with even larger supply cuts than called for by OPEC’s latest deal, shrugging off pressure from U.S. President Donald Trump to increase supply. On Thursday, Trump again called for OPEC to pump more oil to lower prices.
Crude oil is trading above $68 a barrel, close to a 2019 high, boosted by the Saudi move and involuntary supply curbs in Venezuela and Iran, which are both under U.S. sanctions that limit their exports.
“The will is there to bring global oil inventories lower,” said Tamas Varga of oil broker PVM, referring to OPEC strategy.
“Unless there is a sudden jump in OPEC production or a complete break-down in the U.S.-China trade talks, financial investors will find oil attractive to pour more money into.”
OPEC, Russia and other non-members – an alliance known as OPEC+ – agreed in December to reduce supply by 1.2 million bpd from Jan. 1. OPEC’s share of the cut is 800,000 bpd, to be delivered by 11 members — all except Iran, Libya and Venezuela.
In March, the 11 OPEC members bound by the new agreement achieved 135 percent of pledged cuts, the survey found, up from 101 percent in February and a high rate by OPEC standards.
Among exempt producers, Venezuelan supply fell by 150,000 bpd as power cuts hit exports, adding to the impact of U.S. sanctions on state oil company PDVSA and a long-term decline in production.
The latest OPEC+ deal came just months after the group agreed to pump more oil, which in turn partially unwound their original supply-limiting accord that took effect in 2017.
The biggest drop in supply came from Saudi Arabia, OPEC’s biggest producer, which pumped 220,000 bpd less than in February, the survey showed.
Saudi Arabia has reduced production from a record 11 million bpd in November due to concern about a potential glut, although the survey showed that supply fell slightly less than the kingdom had indicated.
The second-biggest drop occurred in Venezuela. Washington imposed sanctions on state oil firm PDVSA in January, while blackouts halted operations at the country’s main oil export terminal of Jose and at crude upgrading plants.
Some sources in the survey put Venezuelan production in March as low as 650,000 bpd. Supply to the market did not fall this low, according to export data, which points to shipments of 800,000 bpd or more despite stoppages.
Output in Venezuela, once a top-three OPEC producer, has been declining for years due to economic collapse.
The survey showed Kuwait and the United Arab Emirates also delivered larger cuts than required under the deal, while Iraq, a laggard on compliance in the last round of cuts, reduced supply as exports from the country’s south fell.
OPEC’s biggest production gain occurred in Libya as the country’s biggest oilfield, El Sharara, restarted.
Among OPEC countries in the supply pact, Nigeria overproduced by the largest amount, the survey found. The start-up of Total’s Egina field helped boost output.
Nigeria says the Egina field produces condensate, a type of light oil excluded from the OPEC cuts. The survey includes the field based on Total’s listing of it as a crude producer.
Smaller producers Congo, Ecuador, Equatorial Guinea and Gabon also pumped above their targets, the survey found.
March’s output is the lowest by OPEC since February 2015, excluding membership changes since then, Reuters surveys show.
The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, Refinitiv Eikon flows data and information provided by sources at oil companies, OPEC and consulting firms.