LONDON: Opec oil output has risen slightly in October as extra supplies from Iraq, Angola and Libya offset a further decline in Iran to its lowest in two decades and disruptions in Nigeria, a Reuters survey found yesterday.
The survey indicates Iraq’s expansion in export capacity and continued high output from top exporter Saudi Arabia are helping to compensate for reduced supply from Iran, whose output has fallen sharply due to Western sanctions.
Supply from the 12-member Organization of the Petroleum Exporting Countries has averaged 31.15m barrels per day (b/d), up from 31.09m b/d in September, the survey of sources at oil companies, Opec officials and analysts found.
Iranian output is unlikely to post further large declines for now, one analyst said, although more buyers could scale back purchases in 2013. Earlier this month, the European Union approved new sanctions against Iran over its nuclear programme. “We see relative stability through the fourth quarter at current levels,” said analyst Sam Ciszuk of KBC Energy Economics. “But as US-given sanction exceptions expire around new year, we’re expecting some further cuts to purchases from Iran’s main remaining buyers, possibly save China.”
September’s Opec total was the lowest since January 2012, when the group pumped 30.95m b/d, according to Reuters surveys. Still, production remains just over 1m b/d more than Opec’s output target of 30m b/d.
The biggest increase came from Iraq, which has overtaken Iran to become Opec’s second-largest producer after Saudi Arabia, even though bad weather slowed exports from the country’s south in the second half of October. Weather permitting, a further increase from Iraq is possible in November. Loading schedules signal both higher shipments of Kirkuk crude from northern Iraq, and record-high exports of Basra crude in the south.
Smaller increases came from Libya, as its oil industry recovers from a shutdown during the 2011 civil war, and from Angola, where exports have edged up from September’s rate which was the lowest since July 2011. Oil prices gave up most an earlier gain yesterday to trade around $109 a barrel. Crude has fallen from a peak for the year of $128 in March. Iran and Nigeria posted declines in output this month, according to the survey.
Iranian supply fell by 30,000 bpd to 2.67m b/d, the survey found. That would be its lowest since 1988, according to figures from the US Energy Information Administration. Output from Iran has dropped sharply this year due to the US and European sanctions on the country. The embargo bars EU insurance firms from covering Iran’s exports, which has hindered imports by some non-EU buyers.
The insurance ban means Iran is increasingly reliant on its own tanker fleet to supply customers, and it has been struggling to meet delivery schedules, slowing down exports. Iran sent more crude in Very Large Crude Carriers to South Korea in October, but at the cost of delaying some shipments to its biggest customer China, sources in the survey said.
Disruptions to supply in Nigeria limited the increase in Opec supply this month. Saudi Arabia pumped almost 10m b/d in October, near the highest rate in decades, the survey found. Saudi Oil Minister Ali bin Ibrahim Al Nuaimi said that Riyadh was satisfied prices had fallen to a level that does not hamper global growth. Reuters
