Venezuelan oil production fell 142,000 barrels per day in February, or 8.9 percent, to just over 1 million barrels per day compared with January and was by far the biggest drop of the 14-country OPEC, as the country faced U.S. sanctions imposed in late January.
In its February report, OPEC said it produced combined production of 30.5 million barrels per day, which is 221,000 less than in January, according to secondary sources tapped by the cartel. OPEC uses secondary sources to better approximate actual figures, rather than depending only on official reports from oil producing countries.
Saudi Arabia’s February production was 10.09 million barrels per day, or an 86,000 barrels-per-day decline which was the second biggest single-country drop after Venezuela.
The OPEC decline in February comes after the cartels’ production in January fell by 797,000 barrels per day to average nearly 30.8 million barrels per day.
OPEC agreed on Dec. 7, led by Saudi Arabia’s requests to cut output to prop up prices, to reduce output by 800,000 barrels per day, to be matched by another 400,000 barrels-per-day production cut by some non-OPEC nations led by Russia, starting Jan. 1.
OPEC kept its world crude oil demand projections unchanged, stressing supply is increasing at a faster pace. “While oil demand is expected to grow at a moderate pace in 2019, it is still well below the strong growth expected in the non-OPEC supply forecast for this year,” the report said.
“World oil demand growth in 2019 was unchanged at 1.24 million barrels per day with total world oil demand marginally below the 100 million barrels per day mark. Total demand is projected to exceed 100 million barrels per day during the second half of 2019,” the report said.
Venezuela’s production declined in recent months in part following a long-standing trend of productivity losses related to what the Energy Information Administration has described as mismanagement.
The country’s output in 2017 was 1.9 million barrels. It exceeded 3 million barrels per day in the 1990s. January saw the lowest monthly level since a strike paralyzed production about 15 years ago.
The United States announced at the end of January sanctions against Venezuelan oil, and has since added new ones, that could further disrupt output.
The sanctions, aimed at preventing Venezuelan President Nicolas Maduro from accessing revenue from the country’s oil exports, initially ordered U.S. companies, including Venezuelan state oil subsidiary Citgo, to abstain from buying crude oil unless revenues go to National Assembly leader Juan Guaido.
The sanctions have been extended since to include intermediaries and finance institutions dealing with Maduro.
Guaido, backed by the United States and more than 50 countries, claims that under Venezuelan law Maduro must make the presidency vacant, on grounds his second re-election was declared illegal by the National Assembly.
Maduro, who has the backing of the Venezuelan army, is recognized as the country’s legitimate leader by several countries, including Russia and China.
There have been concerns that a worsening of the political situation in the country could cause a bigger disruption.
Venezuela, which has the world’s biggest crude oil reserves, suffered a blackout that started last Thursday and is expected to affect crude oil production in March.
Much of the country has been paralyzed for most of the last week without power and water, but with plenty of protests and political volatility.