OPEC Headquarters, Vienna
Oil production by the Organization of the Petroleum Exporting Countries fell to its lowest level since March in July as supply disruptions in Libya and Iraq dented the group’s output, OPEC said Friday, warning of risks of further supply disruptions.
According to secondary sources cited by OPEC in its monthly oil market report, the producer group’s output fell by 100,000 barrels a day in July to 30.3 million barrels a day. Significant declines in Libya and Iraq offset an increase in Saudi Arabia’s production of nearly 100,000 barrels a day.
The fall in the group’s production during a period of peak demand for many OPEC members underlines the impact that unrest in the Middle East and North Africa is having on the oil market. The price of benchmark Brent oil futures rose by 5% in July, while OPEC’s own benchmark basket of crude oil recorded its steepest month-on-month gain since February.
According to OPEC, protests in Libya that closed almost all of the country’s export terminals have cut at least 500,000 barrels a day of supply from the Mediterranean market. Disruptions to a major pipeline in Iraq also dented production last month and planned work on export infrastructure in the country is expected to cut the country’s production a further 500,000 barrels a day from September.
“Supply losses are at over 700,000 [barrels a day] according to industry sources and could reach 1 [million barrels a day], 1.1% of world output, if South Sudan goes ahead with a threatened production shutdown,” OPEC said in its monthly report.
