On August 20, an internal OPEC+ report showed that countries that overproduced oil in May and June will have to slash output by over a million barrels per day for two months to compensate for the oversupply.
On August 18, Saudi Arabia approved amending and extending an agreement with Saudi Arabia Chevron on the Neutral Zone, a previously disputed border area between Saudi Arabia and Kuwait, where an agreement last year restarted production in the area’s jointly-run Wafra and Khafagi oil fields. The Neutral Zone produces up to 0.5% of the world’s oil supply.
On August 17, reports surfaced that Chevron and the Iraqi government are discussing an exploration deal for Iraq’s southern Nassiriya oilfield which is one of Iraq’s largest oil fields and holds an estimated 4.4 billion barrels of crude.
On August 17, Iran signed 13 oil contracts with 14 domestic firms which will raise Iran’s oil production capacity to 185,000 barrels per day. The contracts are worth a total of $1.78 billion USD.
On August 13, Japan confirmed that the state-backed Japan Bank for International Cooperation and Mizuho Bank will offer $330 million USD for a mega solar power plant in western Qatar. The solar power plant is expected to be operational in April, 2022.
On August 9, oil prices rose in response to Iraq announcing it would cut its oil output by 400,000 more barrels per day in August and September, coming into compliance with cuts agreed upon by OPEC+. The U.S. Congress also sent signals a stimulus deal is on the horizon, raising hopes further of economic recovery.
In June, U.S. Census Bureau data showed the U.S. shipped an unusually small amount of crude oil, about 550,000 barrels, to Saudi Arabia for the first time since a 1,000-barrel shipment in 2002. The U.S. Energy Information Administration has no record of any U.S. crude oil exports to Saudi Arabia.
On August 6, Iraq announced it will cut its oil output by an extra 400,000 barrels per day to compensate for its overproduction over the past three months. The decision will bring Iraq closer to compliance with collective production cuts agreed upon by OPEC+.
On August 1 and 2, Russia raised oil and gas condensate output to 9.8 million barrels per day, up from 9.37 million bpd in July, as production cuts under the OPEC+ deal eased. From August 1, OPEC+ agreed to lower output cuts from 9.7 million barrels per day (bpd) from 7.7 million bpd thus allowing for more production.
On July 30, the state-owned China National Petroleum Corporation was in advance talks to purchase a 10% stake in the giant Khazzan natural gas field in Oman from BP, which owns 60% of the field. The deal could be worth $1.5 billion USD.
On July 29, UAE’s biggest energy producer Abu Dhabi National Oil Co. told customers it would cut all four of its crude oil grades by 5% in September, following similar 5% cuts made in July and August.
On July 26, customs data showed that China’s June crude oil imports from Saudi Arabia reached an all time high of 2.17 million barrels per day (bpd). Oil exports to China from Russia and Brazil also peaked in June, with China’s crude oil imports increasing by 34.4% year on year to a record high of 12.99 million bpd.