BAKU, Azerbaijan, Jan.28
By Leman Zeynalova – Trend:
The additional barrels released from OPEC+ back to the market in 2022 are likely to be less than the headline 5.76 mb/d figure, Trend reports with reference to Oxford Institute of Energy Studies (OIES).
OIES analysts not that considering implied production capacity and maximum historical production levels sustained over a period of 3-6 months, OPEC+ can return only 4.5 mb/d of restrained supplies, 1.2 mb/d below target.
“OPEC+ production is expected to reach 38.3 mb/d by end of 2021. Assuming all the remaining barrels are released back to the market by September 2022, OPEC+ production can exceed the (hypothetical) level of 42 mb/d. OPEC (10) production will reach 26.7 mb/d from 21.8 mb/d in June 2021 and non-OPEC+ production 15.3 mb/d from 13.3 mb/d,” reads the report released by the institute.
OPEC+ reached an agreement to extend its output cut agreement to end of 2022 with revisions of baselines for few member countries (Saudi Arabia, Russia, UAE, Kuwait and Iraq). OPEC+ endeavours to unwind the 5.76 mb/d cut by September 2022. OPEC+ producers agreed to ease output cuts by 2 mb/d between August and December 2021, adding 400 kb/d each month over this period. A review is planned during the OPEC+ Conference in December 2021. Extension of agreement until end of 2022 implies there is a buffer of up to 3 months until December 2022 in which OPEC+ may decide not to release the full 400 kb/d increment or increase the cut by up to 400 kb/d. If the 400 kb/d reductions per month will carry on till April 2022, OPEC+ will release 3.6 mb/d to the market. The remaining 2.16 mb/d to be released in monthly increments of 432 kb/d between May 2022 and September 2022.
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