A survey based on ship-tracking data, information from officials, and assessments from consultancies Rapidan Energy Group, FGE, Kpler, and Rystad Energy indicates that OPEC's crude oil production remained broadly stable in December of last year. This stability was achieved as production increases from some members, such as Iraq, offset the decline resulting from Venezuela's output falling to its lowest level in two years. Survey data reveal that OPEC's daily crude production slightly exceeded 29 million barrels for the month, remaining largely unchanged from the previous month. Due to pressure tactics including the seizure of oil tankers, Venezuela's average daily output plummeted by approximately 14% to 830,000 barrels. A small number of member countries, including Iraq, opted to increase production, completing the final phase of the collective output increase plan. Subsequently, the alliance plans to pause these increases during the first quarter of this year. Against the backdrop of a global crude market facing a supply surplus, the OPEC+ alliance, led by Saudi Arabia, intends to maintain stable production levels until the end of March. This week saw the international crude market jolted as the previous U.S. administration detained a vessel linked to Venezuela's leader Nicolás Maduro and announced an indefinite takeover of the country's crude export operations. Although claims were made that U.S. oil companies would invest billions to rebuild Venezuela's dilapidated energy infrastructure, the nation's short-term energy situation remains precarious. Impacted by sanctions and blockades, Venezuela was forced last month to shut down some wells in the oil-rich Orinoco heavy oil belt. This sudden sanction represents another geopolitical challenge for the OPEC+ alliance. The alliance currently faces mounting, layered pressures: it must contend with expectations of a record supply surplus, manage domestic instability in Iran, and deal with the ongoing conflict in Ukraine, which has also hampered crude exports from ally Kazakhstan. London crude futures are currently hovering just above $60 per barrel, near a five-year low, significantly increasing fiscal pressure on OPEC+ member nations. Amidst this climate of uncertainty, the alliance's eight core members reached a consensus this month to once again maintain a production freeze for the first quarter, pausing the large-scale output recovery plan initiated last year. In April of last year, despite ample supply in the global crude market, Saudi Arabia and its allies announced a rapid restart of capacity idled since 2023, a decision that stunned oil traders. Several OPEC representatives disclosed that this move was aimed at reclaiming market share lost in recent years to competitors, including U.S. shale oil producers. The survey indicates that the largest source of production growth within OPEC+ in December was Iraq, which increased its daily output by 80,000 barrels to reach 4.37 million barrels. This production level significantly exceeds Iraq's agreed quota under the OPEC+ agreement, although official data used by the alliance suggests Iraq is still complying with its production target. Prior to the current pause in increases, OPEC+ had formally approved the restoration of approximately two-thirds of its idled capacity. The alliance had idled a total of 3.85 million barrels per day since 2023, with 1.2 million barrels per day of idle capacity still awaiting reactivation. Saudi Arabia and the seven other core OPEC+ member states are scheduled to hold a video conference on February 1st to review production policy for the subsequent months.
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