Opec oil production rises to three-year high
Opec oil output this month has been the highest in more than three years, and the organisation continues to produce above the ceiling set at its December meeting in an effort to calm an oil market worried about geopolitical tensions involving Iran.
Production by Opec members rose by 1 per cent on the month to reach an average pumping volume of 31.405 million barrels per day (bpd), according to a Bloomberg survey of oil companies, producers and analysts.
Growth was driven by Saudi Arabia, resurgent Libyan output and rising Iraqi capacity, offsetting a decline in Iranian production, which slumped to a 20-year low.
"The [Saudi oil] minister has said regularly that there is an abundance of oil, and that he's not turning away anyone who wants oil," said Sadad Al Husseini, the head of the consultancy Husseini Energy and a former Saudi Aramco vice president.
Opec has produced above its self-imposed ceiling of 30 million bpd since deciding in December to raise the voluntary limit from 27 million bpd, and includes Iraqi production for the first time since the 1980s. Growing oil demand from a recovering global economy, and an escalating stand-off between western powers and Iran over the latter's refusal to abandon its nuclear programme, had led to increased demand on Opec.
Oil prices climbed throughout the first three months of this year, with Brent, the benchmark for sales into Europe averaging US$118.60 per barrel. Crude prices were boosted by fears that Iran would block the Strait of Hormuz, the passageway for oil exported out of the Gulf, and supply constraints arising from sanctions imposed on the country.
The sanctions, aimed at interrupting the payment mechanisms used for Iranian sales of crude, are taking their toll on the country's ability to produce and export.
Its output fell by 110,000 bpd to 3.275 million bpd, the lowest level since July 1992, according to Bloomberg.
Production in Saudi Arabia grew by 115,000 bpd to reach 9.82 million bpd, the highest level since August.
Libyan output, racing back to pre-war production levels after the overthrow of Muammar Qaddafi, rose by 100,000 to reach 1.35 million bpd.
Iraqi production increased by 80,000 bpd to reach 2.88 million bpd, levels last reached in 2000.