Crude oil production by OPEC members dropped by 7.2 million barrels daily last month, according to a Reuters survey using data from platform LSEG and analytics information providers, including Kpler, the publication reported.
The biggest production cuts were made by Kuwait, Iraq, the United Arab Emirates, and Saudi Arabia, for a total OPEC output of 21.57 million barrels daily for March. This is the lowest OPEC production rate since June 2020, Reuters noted in its report. Venezuela and Nigeria were the only OPEC members that saw their oil production increase in March.
Iraq suffered the biggest production cut, from 4.15 million barrels daily in February to just 1.4 million barrels daily in March. Kuwait also had to slash production significantly, to just about half a million barrels daily from over 3 million barrels daily before the shutdown of the Strait of Hormuz by Iran following U.S. and Israeli strikes.
The UAE has had to reduce oil production by almost half, Bloomberg reported last month, from 3.56 million barrels daily to about 2 million barrels daily. Saudi Arabia has cut output by around 2 million barrels daily.
“Although we have experienced disruptions in the past, this crisis is the largest ever faced by the oil and gas industry in this region,” Aramco’s chief executive Amin Nasser said last month, echoing the opinion of what seems to be a majority of industry leaders and analysts alike.
Recovery from the oil and gas supply disruption resulting from the war would take quite a while, analysts are warning, so economists are now predicting a global recession, set to emerge in the middle of this year.
“The speed and scale of this energy shock push us into uncharted territory, and it’s possible that diesel, jet fuel, and shipping fuel shortages could inflict greater damage to activity this year,” Ben May, the head of global macro research at Oxford Economics, warned recently, as quoted by City AM.
By Irina Slav for Oilprice.com
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