In December, the Organization of the Petroleum Exporting Countries (OPEC) countries reduced oil production, despite OPEC+’s intentions to increase supply on the market. The key factors in the decline were reduced supplies from Iran and Venezuela, which effectively canceled the effect of previously adopted decisions to increase production.

This is according to the results of a survey by the Reuters agency, which regularly monitors the dynamics of oil production in the cartel countries. The data show that in December, OPEC’s overall indicators were lower than in the previous month, despite formal agreements to increase production.

According to updated estimates, in December OPEC countries produced an average of 28.40 million barrels per day. This is 100 thousand barrels per day less than in November. Iran has made the biggest contribution to the overall reduction, with output falling the most among the group’s members.

Against this backdrop, OPEC+, which includes OPEC countries and their allies led by Russia, has continued to tread carefully. The alliance has slowed its monthly output increases, fearing a surplus on the global oil market and putting pressure on prices.

An additional limiting factor remains the implementation of quotas. Many members of the agreement are already operating close to their limits, and some countries are required to make additional compensatory cuts to make up for previous overproduction. This significantly reduces the real impact of any decisions to formally increase production.

Under the OPEC+ agreement on production levels in December, five OPEC members — Algeria, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates — were to increase production by a combined 85,000 barrels per day. At the same time, Iraq and the UAE were to make compensatory cuts totaling 135,000 barrels per day.

However, a Reuters survey showed that the actual increase in production by these five countries was much more modest. The real increase was only about 20,000 barrels per day, which explains the overall decline in OPEC production in December and the limited impact of OPEC+ decisions on the market situation.