OPEC: Oil Production of Members Decreased by 800,000 Barrels in January

The Organization of the Petroleum Exporting Countries (OPEC) reported on Tuesday, February 12, that in January, the daily oil production of its members fell by about 800,000 barrels compared to October 2018, dropping to 30 million and 806 thousand barrels. OPEC and its allies led by Russia had agreed late last year to reduce their production by about 1.2 million barrels starting in January for six months, with OPEC's share being 800,000 barrels. Iran, Venezuela, and Libya are exempt from this agreement. The report published on OPEC's official website states that the OPEC oil basket price in January was $56.94, a decrease of 3.2% from the previous month. However, with the reduction in OPEC's oil production, the price of this organization's oil basket has risen above $61 in recent days. OPEC statistics show that Iran's oil production in January fell by another 4,000 barrels compared to December of the previous year, dropping to 2 million and 754 thousand barrels, the lowest level even before the nuclear agreement in mid-2015. Following the nuclear agreement known as the JCPOA, global sanctions against Iran were lifted on January 1, 2016, and Iran's oil production surged back above 3 million and 800 thousand barrels. However, following the U.S. withdrawal from the JCPOA in May of this year and the imposition of oil sanctions in November, Iran's oil production has decreased again. The U.S. has currently granted exemptions to eight countries—China, Japan, South Korea, India, Taiwan, Turkey, Greece, and Italy—to continue limited purchases of Iranian oil until May of next year. However, recently, the U.S. stated it does not intend to extend these oil exemptions after May. Iran's crude oil exports have now fallen by more than 50% to about 1 million barrels, but the Iranian government has forecasted daily exports of 1 million and 540 thousand barrels in its budget bill for the coming year. If such export volumes are not achieved, the government will face a significant budget deficit. Recently, the Central Bank of Iran released a report indicating a budget deficit of 45 trillion tomans for the government in the first nine months of the current year, an unprecedented figure in the history of the Islamic Republic. OPEC also mentioned Venezuela's oil production, which in January decreased by 59,000 barrels compared to December 2018, reaching about 1 million and 106 thousand barrels. Reports indicate that following the recent U.S. sanctions against this country, Venezuela's production is declining at an even faster rate. Venezuela's oil production was about 1 million and 911 thousand barrels in 2017, and since then, production has been reduced every month.