The latest crude production cuts from a group of major oil-producing countries led by Saudi Arabia may not hurt as much as previous cuts. That is thanks to what is being described as a burst in supply from other, smaller oil-producing countries.
These countries include:
- Nigeria.
- Kazakhstan.
- Iran.
- Norway.
- Brazil.
- Guyana.
Iran and Nigeria are both members of OPEC+, which announced its own crude production cuts in October 2022.
Nigeria has seen the biggest increase in recent months, producing 350,000 more barrels per day in February 2023 than September 2022. Nigeria, Kazakhstan, Iran, Norway and Brazil have all increased their daily crude production by more than the United States did over the same timeframe.
The increased efforts from these smaller oil producers has helped balance major cuts to crude production from Saudi Arabia and the United Arab Emirates. Since September, Saudi Arabia has lowered daily crude output by 560,000 barrels to about 10.5 million, according to International Energy Agency data from February. Iraq, the UAE and Kuwait have each cut output by more than 100,000 barrels a day, too.
After last October’s OPEC+ cuts were announced, Goldman Sachs bumped its Brent crude forecast for the first quarter of 2023 to $115 per barrel. Instead, the most-active Brent futures averaged $82 per barrel in the quarter, sliding to a closing low of less than $73 per barrel in mid-March.
Despite the efforts, Americans have begun feeling the cuts at the pump. The national average for a gallon of regular gasoline was $3.60 Monday, April 10. That’s up 10 cents per gallon since the announcement.
“Look, we don’t think that production cuts are advisable at this moment, given the market uncertainty. And we made that clear. But I tell you, we’re focused on moving ahead here on prices for American consumers, not barrels,” National Security Council Spokesperson John Kirby said Monday, April 3. “And I think, as you know, prices at the pump have come down significantly since last year. We’re also just in a different place in the markets than we were last year.”
