Oil Prices Plunge on OPEC+ Production Cut Speculation
Oil prices tumbled more than 4% on Tue morning as speculation continued that the eight leading OPEC+ producers would unwind their voluntary production cuts.
Brent crude fell 4.46% to USD74.06, while WTI crude fell 4% to USD70.61.
Crude production in Iraq's semi-autonomous Kurdistan region continues to increase as industry organizations have stated output surpassed the 350,000 bpd mark in recent weeks, the highest since early 2023.
Iraq, the largest overproducer within OPEC+ that pledge to cut 1.44 million bpd of output over the next 12 months as part of a compensation plan, has now vowed to confront Kurdish authorities over surplus production volumes.
International oil companies operating in Kurdistan have been expanding into new projects for the first time since the 2023 pipeline closure to Ceyhan, with DNO mobilizing a rig to drill a new well in the Tawke license and Gulf Keystone starting round-the-clock trucking operations.
Baghdad has threatened to withhold the Kurdish Regional Government’s share of the federal budget if it does not reduce its production to a mere 46,000 b/d and cut back on a widespread net of smuggling to Turkey and Iran.
Libya's upstream segment has gone almost completely haywire with 60% of production shut in because of a nationwide oil blockade, but that story has by now been overshadowed by wild speculation over OPEC+ policy. The eight leading OPEC+ producers are expected to start unwinding voluntary output curbs with a 180,000 bpd boost in Oct, sending oil prices tumbling with Bent plunging toward the USD73 handle.
According to several sources, Libya's Sarir, Mesla, and Nafoura oil fields have received instructions to resume production amidst an ongoing oil blockade by Field Marshal Haftar, however, only to feed local power plans and small refineries in the east.
According to Kpler, China's crude imports averaged 10.5 million bpd in Aug, up almost 1 million bpd compared to the 18-month low of Jul, but they remain well below any monthly average in Feb-Jun.
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