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A Closer Look at OPEC

A Closer Look at OPEC thumbnail

Taking a closer look at OPEC. All OPEC and price data below is through December. All production data is in thousand barrels per day.

Iran and Libya have had serious political disruptions in their production numbers. Simply adding them to the OPEC numbers distorts the picture. To try to figure out what has been happening to OPEC we need to look at OPEC without Iran and Libya.

OPEC Less Iran and Libya

Here is OPEC less Iran and Libya, or the OPEC 10 if you will. I have marked August 2012 as what I call the “Price Peak”. Not the peak in oil prices but the production peak that was brought about by the increase in the price of oil. That price increase began in early 2009 and by March 2011 was well above $100 a barrel. And the price of oil did not drop below $100 a barrel until late August 2014.


Here are is the production change from August 2012 to December 2015. As you can see the lions share of increase came from Iraq with a little help from Saudi Arabia and the UAE.


Removing Iraq from the mix and the remaining 9 OPEC nations were actually down during that period. Except for Iraq, OPEC production from August 2012 until the present, is actually down in spite of the price of oil being in excess of $100. And that is not even counting the huge decline from Libya during this period. The Iranian decline was prior to this period.

The price data in the chart below is from the Mundi Index and is the average of three spot prices; Dated Brent, West Texas Intermediate, and the Dubai Fateh, US Dollars per Barrel

Seven Opec Nations

This is a chart of the combined production of Algeria, Angola, Ecuador, Kuwait, Nigeria, Qatar and Venezuela, seven of the 12 OPEC nations. The point I am driving at is that oil, averaging about $105 a barrel, could not stop the decline in the combined production of these seven OPEC nations. These OPEC nations have peaked and a return of $100 plus oil will not change that simple fact.


Barring the collapse of the Arab Spring and peace breaking out in Libya, any further increase in OPEC production must come from Iran and/or Iraq, Saudi and the UAE. Saudi and the UAE, I believe are producing at or extremely close to their peak, and I am not so sure about Iraq. At any rate the OPEC 10, in my opinion, has peaked. Any possible increase in Iraqi production will be offset by the decline in production of the other 9.

Crude oil production charts of all 12 OPEC nations can be found at the page OPEC Charts.

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24 Comments on "A Closer Look at OPEC"

  1. twocats on Sat, 23rd Jan 2016 6:12 pm 

    If over the next 5 years, Iraqi and Iranian production (on-average) goes up, SA and UAE increase or stay flat, and one or two of the “OPEC 9” have a “temporary halt in decline”, well, you could easily see us bumping along plateau with a new high thrown in every few years, just as you see if the very first chart. I’m not saying its going to happen, but declaring peak oil to be imminent based on production numbers alone is not very factual. You’d have to do some quality CAPEX analysis to show more definitely that an “air pocket” is developing. Do I have anecdotal evidence that it is? Certainly. The longer oil stays low the more likely such a pocket will stick a fork in the peak oil pie, but I’m still feeling that at least another 4 months of the current situation (high production, low oil prices, and economic/market distress) would be required to seal the deal.

  2. Nony on Sat, 23rd Jan 2016 7:17 pm 

    Ron squints at these charts and thinks he can make intuitions basically from “momentum”. Anything output going down is “declining” and is alleged to be irreversible. Any flat output is poised for a decline. Growing output is acknowledged but with no possibility of acceleration and with some skepticism for continued growth (e.g. comments about Iraq stability).

    However, looking at these graphs in PARTICULAR Saudi Arabia shows that they can go up or down. SA has lowered production several times and easily reversed it. This is not “decline”. (Consider the Stuart Staniford allegations of decline in the mid 2000s. Or consider the Simmons comments about imminent decline even earlier.)

    It’s actually very questionable how much MORE Saudi Arabia could do. They produce more than the US and with only ~100 rigs (little more last few months). Why invest in infrastructure if you are already periodically cutting production? The oil is still there. Also, consider that SA burns a lot of crude (rather than importing natural gas from Qatar). They show pretty easily that (internally) crude is plentiful.

    Imagine SA developed by Texans! The same really applies to Iran and Iraq. Big countries with complicated geology, long trends of oil, not fully characterized (nothing like Texas). And this doesn’t even consider the potential for shale drilling in the Middle East.

  3. Apneaman on Sat, 23rd Jan 2016 7:32 pm 

    Texas oil men – the ultimate expression of the ape cancer. First they would corrupt the ME politicians and regulatory people, then they would send out the snake oil sales men for low income sucker investors and then make grand, but empty promises to local communities then proceed with drilling and poison the land, air, water, people and leave busted up infrastructure, rape victims and addicts in their wake then go home and brag online about how much money they made and claim that everyone should be grateful. The rockmen are not your mommies so suck it up.

  4. makati1 on Sat, 23rd Jan 2016 7:43 pm 

    Ap, perfect description!

  5. Apneaman on Sat, 23rd Jan 2016 8:27 pm 

    I bet there once were Texan like aliens – The Ferengi they were called.

    The aliens are silent because they’re dead

    “Life on other planets would likely be brief and become extinct very quickly, say astrobiologists from The Australian National University (ANU).
    In research aiming to understand how life might develop, the scientists realised new life would commonly die out due to runaway heating or cooling on their fledgling planets.”

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