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What OPEC+ Production Cut?

What OPEC+ Production Cut?

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HFI Research
Dec 28, 2022
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What OPEC+ Production Cut?
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We are near the end of December and I hate to say it, but there's been no real OPEC+ production cut. We've now had nearly 2 full months of crude export data, and from what I can see, there's been no material drop. The only variable that's getting volatile month-to-month is Russian crude exports. 

So is this a production cut? Or is this disguised as a production cut?

Fear not my friends, I have a good answer for you. For those of you following the Russian communique closely, you will have noticed that Russia is guiding to a production loss of 500k b/d to 700k b/d. Here is a link to the direct quote. 

In addition, Russia has announced that it will not sell oil to any country imposing the price cap. This is despite the fact that Russian crude is selling below the price cap.

What's interesting about all this is that the OPEC+ production cut is targeting an implied production cut of ~800k b/d to ~1 million b/d. So what we end up with is a timing issue.

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