OPEC Crude Oil Production Dropped by 300,000 Bpd in March Amid Russian Sanctions

Crude oil production from the Organisation of Petroleum Exporting Countries (OPEC) and allies fell by 300,000 barrels per day in March as sanctions hit Russian output, the latest Platts survey by S&P Global Commodity Insights, has found.

OPEC production decreased 60,000 bpd to 28.97 million bpd, while non-OPEC allies saw output fall by 240,000 bpd to 13.40 million bpd in March, S&P stated.

Production in the largest non-OPEC producer in the group, Russia, fell by 260,000 bpd to 9.6 million bpd in March. This followed the introduction of G7 price caps and EU import bans on most Russian crude and oil products from December, 5, 2022, and February 5, respectively.

The restrictions are part of Western sanctions imposed in response to Russia’s invasion of Ukraine.

Russian officials said previously that the country will cut crude output by 500,000 bpd from February levels from March until the end of 2023. They said that this is in order to reduce the discount on Russian crude and to stabilise deliveries. Sanctions are expected to further hit Russian output in coming months.

Nigeria recorded its first crude oil production decline in six months in March this year, first time since output nearly fell to 900,000 barrels per day in September last year, data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), showed.

The country’s production declined to 1.26 million bpd during the month, indicating a 2.9 per cent decrease from the over 1.3 million bpd recorded in February.

The figure released by the nation’s upstream regulatory agency differed markedly from an earlier Reuters survey which stressed that Nigeria was nearing its 1.6 million barrels per day target in the first quarter of 2023.

While the Organisation of Petroleum Exporting Countries (OPEC) production allocation to Nigeria remains at about 1.8 million bpd, the country’s output in February was roughly 1.3 million bpd, still short of the cartel’s expectation.

But the S&P survey stated that recovery in Kazakhstan’s production partially offset Russia’s significant drop in production on the non-OPEC side.

In contrast, OPEC’s biggest producer, Saudi Arabia, saw production hold relatively steady at 10.45 million bpd in March, down just 10,000 bpd from February. Stronger exports were supported by draws from inventories, while the Jazan refinery ramped up runs, the survey found.