IEA: Large-scale production cuts in OPEC+ to lead to sharp reduction in reserves

The countries participating in the OPEC+ agreement in February 2021 produced 39.46 million barrels of oil per day (bpd), which is 0.6 million bpd less than in January, according to the report of the International Energy Agency (IEA), Report informs.

The oil production cut deal in February was completed by 112 percent versus 103 percent a month earlier.

At the same time, OPEC countries fulfilled the agreement by 125 percent of the plan, cutting oil output to 21.73 million bpd, non-OPEC countries - by 89 percent, to 14.7 million bpd.

So, Saudi Arabia in February kept production at 8.14 million bpd, which is almost 1 million bpd below the January level. Russia, according to the IEA, produced 9.26 million bpd in February, fulfilling the Vienna deal by 93 percent.

At a meeting in January 2021, the OPEC+ countries agreed on production parameters for February - March. So, Saudi Arabia undertook to cut output by 1 million bpd. The rest of the countries retained the level of oil production, with the exception of Russia and Kazakhstan, which received the right to increase production in total by 150,000 bpd.

According to IEA experts, a large-scale reduction in oil output in OPEC+ will lead to a sharp reduction in reserves in the second half of 2021.

However, there are still enough oil reserves in tankers and storage facilities to optimally supply the world market, the IEA concluded.

The agreement between the OPEC countries and non-member states of this organization, including Russia, started in 2017, but in 2020 it was updated. Then the alliance, due to the fall in demand caused by the coronavirus pandemic, cut oil production by 9.7 million bpd since May. As demand recovered, the restrictions were adjusted, and for this March they amount to 7.05 million bpd, in April - 6.9 million bpd, and taking into account the voluntary reduction of Saudi Arabia - 8.05 and 7.9 million bpd, respectively.