The 12-member Organization of the Petroleum Exporting Countries' (OPEC) crude oil production output plunged by 630,000 barrels per day (b/d) in March to average 29.17 million b/d, according to a just-released Platts survey of OPEC and oil industry officials and analysts. Higher volumes from several member states failed to cover the loss of 930,000 b/d of Libyan supply, the survey showed.
Excluding Iraq, which does not participate in OPEC output agreements, production from the 11 members bound by notional quotas (OPEC-11) fell by 580,000 b/d to 26.52 million b/d in March from 27.1 million b/d in February.
Libyan production, which had already fallen to 1.39 million b/d from 1.58 million b/d in February, was estimated to have averaged around 460,000 b/d over March.
"Even the simple counting of barrels shows how difficult it will be for the market to recover from the loss of so much Libyan crude," said John Kingston, Platts global director of news. "Beyond that, the quality of the crude coming out of Libya is one of the highest in the world, with very good yields on the transportation fuels, particularly diesel, which the world needs. So one barrel of crude from another OPEC country doesn't neatly replace one barrel of Libyan crude. The market will need to see a decline in demand to balance, and we are seeing signs of that reaction to higher prices ongoing."
OPEC kingpin Saudi Arabia pumped an average 9 million b/d, a 300,000 b/d boost from February levels. With the kingdom claiming 12.5 million b/d of capacity, this leaves Saudi Arabia with some 3.5 million b/d of spare capacity.
The United Arab Emirates (UAE) also increased production, by 100,000 b/d to an estimated 2.5 million b/d, while Kuwait boosted output by 70,000 b/d to 2.4 million b/d, the survey found.
Angolaramped up production to 1.7 million b/d from 1.65 million b/d in February.
But production fell in Nigeria, due in part to maintenance at the Bonga field, with the country's total volumes declining to 2 million b/d from 2.16 million b/d in February.
Venezuelan output fell by 20,000 b/d to 2.21 million b/d. Iraqi production fell by 50,000 b/d to 2.65 million b/d from 2.7 million b/d in February.
Iranian production was steady. However, industry sources said Iran was holding significant volumes of floating storage because of marketing difficulties. It was not clear whether this was crude only or a mix of crude, condensates and fuel oil. One industry source said 15 VLCCs (very large crude carriers) were being used.
OPEC has a notional output target of 24.845 million b/d for the 11 members bound by quotas. The latest estimates of OPEC-11 output show that, as a result of the plunge in Libyan supply, the volume of overproduction has been reduced to 1.675 million b/d.