OPEC May Need to Cut Again Amid Higher Output From “Fragile Five”

OPEC’s core members may need to consider further production cuts as some of the group’s most troubled nations - Iran, Iraq, Libya, Nigeria and Venezuela - achieve unexpected supply growth, Ed Morse, Citigroup’s head of commodities research, said.

• The five countries, which struggled to achieve with output in recent years – will add around 900kbpd of production this year and will at least match those levels in 2024, the bank said,
• “All of a sudden they are sources of growth, and they will be sources of growth for five, four years — or maybe even longer in the case of Iraq and Venezuela. It strikes us that the core OPEC+ countries have a problem on their hands,” Morse said.
• The five nations are all showing positive signs of supply recovery, while growth in oil demand will be constrained by fading expansion in China, Morse added.
• As a result of higher output from the five nations, OPEC may face pressure to cut output further, Morse said.
• “It’ll be a big problem,” Morse said. “I think they’ll have to cut, and I don’t know how easy it is for them to do that.”