Note Apr. 20, 2020: For more than three years starting in January 2017, the alliance known as OPEC+ cut crude oil production in an effort to prevent a glut as U.S. output surged. The coalition frayed in March when its two largest producers, Saudi Arabia and Russia, couldn't agree on further curbs while the coronavirus outbreak destroyed demand. This graphic tracks the progress of the alliance before that impasse.
Following a brief price war, OPEC+ and other international partners reached a new deal in April 2020 to curb output, with effect from May. This graphic doesn't encompass that agreement.
Global oil supply data for January will make for frustrating reading in Saudi Arabia, with the next meeting of the OPEC+ production alliance just weeks away. The world’s biggest crude exporter hinted in December, when the coalition revised the terms of its pact, that other nations should do more to limit a glut. Once again, though, Saudi Arabia did the heaviest lifting by far, while some key allies like Russia and Iraq struggled to comply in full.
OPEC+ reset the terms of its agreement as of Jan. 1. Half of the 10 OPEC countries now participating in supply cuts conformed last month, for a rate of 138%, according to Bloomberg calculations from the group’s secondary source data. Non-OPEC adherence was 76%, estimates from preliminary International Energy Agency data on crude supply show. Overall, the OPEC+ coalition had a compliance rate of 119%.
| Country | Reference OutputRef. Output | Pledged Cut | Output Target | Jan. 2020 |
|---|---|---|---|---|
| Algeria | 1,057 | -44 | 1,013 | 1,012 |
| Angola | 1,528 | -47 | 1,481 | 1,374 |
| Congo | 325 | -14 | 311 | 293 |
| Eq. Guinea | 127 | -5 | 122 | 124 |
| Gabon | 187 | -8 | 179 | 196 |
| Iraq | 4,653 | -191 | 4,462 | 4,501 |
| Kuwait | 2,809 | -140 | 2,669 | 2,665 |
| Nigeria | 1,827 | -74 | 1,753 | 1,776 |
| Saudi Arabia | 10,633 | -489 | 10,144 | 9,733 |
| U.A.E. | 3,168 | -156 | 3,012 | 3,034 |
| Total OPEC | 26,314 | -1,168 | 25,146 | 24,708 |
| Azerbaijan | 725 | -27 | 698 | 662 |
| Bahrain | 206 | -7 | 199 | 202 |
| Brunei | 103 | -4 | 99 | 117 |
| Kazakhstan | 1,689 | -57 | 1,632 | 1,690 |
| Malaysia | 570 | -20 | 550 | 561 |
| Mexico | 1,744 | -58 | 1,686 | 1,712 |
| Oman | 883 | -34 | 849 | 816 |
| Russia | 10,623 | -300 | 10,323 | 10,389 |
| South Sudan | 132 | -3 | 129 | 135 |
| Sudan | 74 | -4 | 70 | 71 |
| Total Non-OPEC | 16,748 | -514 | 16,234 | 16,356 |
| Total OPEC+ | 43,062 | -1,682 | 41,380 | 41,064 |
While the cuts have been in place for more than three years, changes were made in January. The alliance pledged to cut by an additional 500,000 barrels a day at a minimum. In addition, Ecuador left the Organization of Petroleum Exporting Countries, and Russia was able to exclude condensate from its crude production, ostensibly making it easier to meet its target.
Even though a few major OPEC producers failed to comply, Saudi Arabia, Kuwait and Angola helped push the organization safely into full conformity with the revised agreement. Russia, responsible for more than half of the non-OPEC curbs, missed its target for the sixth month in a row. In fact, just two non-OPEC producers conformed: Azerbaijan and Oman. OPEC members Libya, Iran and Venezuela are exempt. Bloomberg estimates for OPEC+ compliance in 2020 include crude production only.
Saudi Arabia agreed to curb by an extra 400,000 barrels a day beyond its pledged cut of 489,000 if others—notably Iraq—also deepened their curbs. In January, the kingdom slashed supply by an average 900,000 barrels daily, though Iraq still failed to reach its target. However, the extra Saudi effort is hardly new: the country exceeded its required cut by at least 400,000 barrels a day in all but three months last year. Bloomberg measures OPEC compliance without the voluntary Saudi curb.
In recent years, OPEC+ has been forced to contend with rising American production and a trade war between the U.S. and China, both of which weighed on crude prices. Now there’s a third threat: the coronavirus outbreak, which has killed thousands in China while bringing the country to a halt. Chinese demand for oil products is likely to plunge by more than 35% year-on-year in the first quarter, Morgan Stanley said in a recent report, citing data from researchers at China oil giant CNPC.
The next OPEC+ gathering, on March 5-6 in Vienna, is among the most anticipated in years. For weeks, there was speculation that the coalition’s ministers would hold an emergency meeting to address the coronavirus threat. Such a gathering never happened. In addition, Russia, one of the two powerhouses behind the pact, has increasingly seemed to distance itself from the group—if compliance is anything to judge by.