Baku, Azerbaijan, Dec.1
By Leman Zeynalova – Trend:
The agreement reached by OPEC in Vienna to cut the group’s total oil production is unlikely to have a significant economic impact on Saudi Arabia, according to the analysts of the UK Capital Economics consulting company.
During the Vienna meeting held Nov.30, OPEC members decided to implement a new OPEC-14 production target of 32.5 million barrels per day.
The decision was made in order to accelerate the ongoing drawdown of the stock overhang and bring the oil market rebalancing forward.
The agreement doesn’t seem to represent a major shift in Saudi oil policy, according to the analysis obtained by Trend.
Saudi Arabia undertook the biggest cut in oil production, as the country agreed to reduce the output volume by 486,000 barrels per day to 10.058 million barrels per day (mbd) from Jan.1, 2017.
“The reported cut in Saudi oil production would be in line with seasonal norms – note that Saudi oil production averaged 10.1 mbd between December 2015 and April 2016,” said the analysts.
Capital Economic believes that the impact on Saudi Arabia’s economy is ambiguous and will depend on how long the deal lasts for and what happens next to oil prices.
The second biggest cut was undertaken by Iraq, which agreed to reduce its oil output by 210,000 barrels per day to 4.351 mbd, UAE – 139,000 bpd to 2.874 mbd, Kuwait – 131,000 bpd to 2.707 mbd.
Algeria’s oil production will be reduced by 50,000 bpd to 1.039 million bpd, Angola – 87,000 bpd to 1.673 million bpd, Ecuador – 26,000 bpd to 522,000 bpd, Gabon – 9,000 bpd to 193,000 bpd, Qatar – 30,000 bpd to 618 million bpd, Venezuela – 95,000 bpd to 1.972 million bpd.
Iran is planned to increase the output by 90,000 bpd to 3,797 million bpd.
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