Crude oil production across OPEC slumped by 170,000 bpd last month to 32.04 million bpd according to a Bloomberg survey among energy analysts.
This is the lowest daily production rate in the cartel since April 2017, when it pumped 31.9 million bpd.
Yet once again the drop was not the result of a conscious effort. Venezuela’s production continued to fall, shedding another 100,000 bpd in March, which made the struggling South American economy the main—if unwilling—contributor to the OPEC production decline.
Venezuela pumped 1.51 million bpd last month, versus its OPEC quota of 1.97 million bpd. The country’s cumulative cut as of March stood at 557,000 bpd, versus a pledge cut of just 95,000 bpd.
Algeria was another contributor to the production decline, with output there falling by 40,000 bpd to 1 million bpd as field maintenance season kicked in.
Libya was also an unwilling participant in the overall decline, with production there slipping below 1 million bpd on field outages.
Saudi Arabia also continued to pump less than it had pledged to, with the daily average falling by another 10,000 bpd last month to 9.87 million bpd.
In comparison, Russia’s production hit the highest in 11 months in March, at 10.97 million bpd, still almost in line with its pledge to OPEC, which was for a cut of 300,000 bpd from its November 2016 average daily of 11.247 million bpd.
In the United States, daily crude production averaged 10.398 million bpd in March, data from the Energy Information Administration shows.
OPEC has been upbeat about its compliance with the cuts agreed in November and December 2016, but the fact that it was Venezuela that the cartel had to thank for this compliance in large part has not gone unnoticed by industry observers.
In fact, the International Energy Agency recently warned that Venezuela’s falling production could at some point tip the market into a deficit.
This prospect, however, is for now remote in the face of growing production from non-OPEC producers led by the United States.