OPEC+ committee set to meet with quota compliance, catch-up cuts atop its agenda

London — The OPEC+ alliance still has some unfinished business with its historic production cuts of the last three months that were eased in August.

Members that exceeded their output quotas must implement so-called compensation cuts through September to make up for their overproduction, and a key ministerial monitoring committee is set to mete out those volumes when it gathers online Aug. 19.

Data compiled for the committee by the OPEC secretariat and seen by S&P Global Platts indicates several members have much compensating to do.

Iraq was the biggest violator, pumping an average of 285,000 b/d above its quota in May, June and July, according to Platts' calculations based on the confidential data, which comprise averages of the six secondary sources used by the OPEC+ alliance to monitor output.

The country has already pledged catch-up cuts of 400,000 b/d in August and September, in a plan endorsed by Saudi Arabia, the co-chair with Russia of the Joint Ministerial Monitoring Committee.

Nigeria had the second largest excess at 105,000 b/d for the three months, according to the data, though it has disputed the characterization of its Agbami grade as crude by three of the secondary sources, including Platts.

Agbami production has averaged about 160,000 b/d in recent months, as per Platts estimates, so stripping those barrels out of Nigeria's total output figure would improve its compliance significantly.

Delegates on a technical committee that convened online Aug. 17 said the Agbami debate was a major point of contention in the meeting. The issue has bearing on Nigeria's revenues and market share, as well as overall crude market balances, making it a particularly thorny issue for OPEC+, officials said.

Overall, the entire 23-country OPEC+ coalition exceeded its quotas by 357,000 b/d from May-July, according to Platts calculations, despite significant overcompliance by Saudi Arabia.

Delegates said the technical committee pegged overall cut compliance at 95% for July, compared to 107% in June and 87% in May.

The JMMC will meet at 2 pm Vienna time (1200 GMT) on Aug. 19.

Officials have said they do not expect the committee to discuss any changes to the OPEC+ production accord, which called for 9.7 million b/d of collective cuts from May-July, easing to 7.7 million b/d from August through the end of the year, and 5.8 million b/d from January 2021 to April 2022.

OPEC+ production (million b/d)

* Mexico exited the OPEC+ production cut accord after June. Its total over/under is calculated only for May-June.

Source: OPEC+ document