Highlights

Oil alliance pumped 40.85 mil b/d in September

Nigeria output up 100,000 b/d, Iran's 60,000 b/d

Geopolitics, tightening market to challenge OPEC+

OPEC+ crude oil production increased 330,000 b/d in September, the second successive monthly jump, as output hikes in Nigeria, Iran and Kazakhstan balanced out ongoing cuts by Saudi Arabia and Russia, the latest Platts survey by S&P Global Commodity Insights has found.

The Saudi-Russia led alliance pumped 40.85 million b/d on average in September, with the 13 OPEC members producing 230,000 b/d more month on month, compared to a 100,000 b/d collective increase from the coalition's non-OPEC countries.

The OPEC countries collectively pumped 27.76 million b/d, up from 27.53 million b/d in August.

Despite the increase, production remains well below summer levels, with the group's de facto leader, Saudi Arabia, continuing a 1 million b/d voluntary cut since July to support prices. Key non-OPEC partner Russia cut exports by 500,000 b/d in July, which it eased to 300,000 b/d from September.

Riyadh and Moscow recently announced the cuts -- which have helped push oil prices to 10-month highs -- would continue past December, despite S&P Global predicting a 1.8 million b/d supply deficit in H2 2023. Moscow is banking on its oil revenues to help fund its expensive war effort, while the kingdom has embarked on a costly economic reform agenda.

Platts, a part of S&P Global, assessed Dated Brent at $91.34/b on Oct. 9, up 21.8% since the start of July.

Nigeria, Iran boost

September's output hike was led by Nigeria, which saw crude production rise by 100,000 b/d to 1.48 million b/d according to the survey, due in part to the full resumption of exports of its Forcados grade. The country has been tackling vandalism and crude theft in the restive Niger Delta region and is eyeing a further recovery by the next OPEC+ meeting in November, when underperforming African producers face the prospect of a 2024 quota downgrade.

Nigeria, Angola and the Republic of Congo have consistently produced below their OPEC+ targets in recent years due to underinvestment and technical issues at aging fields.

Iran, which has begun boosting supply in spite of US sanctions, saw production hit 3.01 million b/d in September, according to the survey, its highest since October 2018.

Market participants have chalked the rise up to Iran's success in evading US sanctions and Washington's eased enforcement amid backchannel diplomatic talks and fears in the US of an oil supply squeeze.

Western countries have turned their focus on Russia in response to its invasion of Ukraine, enabling customers to take more Iranian crude.

Meanwhile, Saudi Arabia, with its voluntary production cut, pumped 9.01 million b/d in September, a rise from August, as exports and stocks were higher. The country has the stated capacity to produce 12.5 million b/d, including from the Neutral Zone that it shares with Kuwait.

On the non-OPEC side, Kazakhstan saw a 90,000 b/d production rise following the conclusion of maintenance and resumption of production at Tengiz.

Russian production rose 30,000 b/d to 9.43 million b/d, according to the survey, as it eased its voluntary export cut from 500,000 b/d in August to 300,000 b/d in September.

Russia's seaborne crude exports rose 10% month on month in September to 3.37 million b/d -- the highest level since June. Exports increased as Russian refineries carried out significant maintenance works in September. A Russian ban on most diesel and gasoline exports introduced in mid-September did not impact crude production volumes.

Despite the month-on-month production hike, the 19 OPEC+ alliance members with quotas are collectively undershooting their targeted production by 856,000 b/d according to the survey, primarily because African producers are unable to pump to their agreed level.

Iran, Libya and Venezuela are exempt from production quotas, while non-OPEC Mexico remains in the group despite not agreeing to any output limits.

Geopolitical instability

The full 23-country OPEC+ group is due to meet Nov. 26 for its next ministerial meeting in Vienna. It comes at a time of heightened geopolitical instability, amid a bloody ongoing war between Hamas militants and Israel's army, as well as concerns over an upcoming oil supply crunch balanced by fears that persistent high interest rates could lead to a global economic slowdown.

The Platts survey figures measure wellhead production and are compiled using information from oil industry officials, traders and analysts, as well as reviewing proprietary shipping, satellite and inventory data.

OPEC+ crude oil production

Unit: million b/d

Source: Platts OPEC+ survey by S&P Global Commodity Insights