OPEC+ supply gap widens in March as sanctions hit Russia’s production

A report from the OPEC + group seen by Reuters showed that the production of the alliance of oil producers was less than production targets in March by 1.45 million barrels per day, with the beginning of a decline in Russia’s production after the sanctions imposed by the West.

The report also showed that Russia’s production was about 300,000 barrels per day less than its quota in March, as it produced 10.018 million barrels per day, based on secondary sources.

The data showed that compliance with production cuts rose to 157 percent in March from 132 percent in February, the highest level since the group began record production cuts of about ten million barrels per day in May 2020 to counter the impact of the pandemic on demand.

OPEC +, which includes OPEC and allies led by Russia, agreed last month to raise oil production by another modest monthly increase of 432,000 barrels per day for the month of May, resisting pressure from major consumers on it to pump more.

With the group backtracking on production cuts, a number of producers, particularly West African countries facing a lack of investment and an exodus of international energy companies, are failing to keep pace.

At its meeting last month, OPEC+ also abandoned the Paris-based International Energy Agency as one of its secondary sources, replacing it with Wood Mackenzie and Rystad Energy, a consultancy.