OPEC+ production was 720,000 barrels per day below target in December, with Russia and Kazakhstan contributing most to the shortfall amid ongoing disruptions. Ukrainian drone attacks on key Kazakh export terminals have significantly reduced production, suggesting that global oil oversupply may be lower than expected, notes Carsten Fritsch, a commodity analyst at Commerzbank.

Ukrainian drone attacks disrupt Kazakh oil production

“According to OPEC’s monthly report, OPEC+ oil production in December was 42.83 million barrels per day. Countries bound by production targets produced a good 720,000 barrels per day less than agreed. A study by S&P Global Energy showed a similar result. The largest deviation from the norm occurred in Russia.”

“Kazakhstan’s production fell below target (without compensatory cuts) for the first time in a year. This was due to a sharp decline in crude oil production following a Ukrainian drone attack on an important Black Sea export terminal in late November. Kazakhstan’s production remains subdued in January.”

“According to Reuters, Kazakh oil production in the first 12 days of this month was 35% lower than the December average. This week, three tankers near the mentioned export terminal also became the target of drone attacks. Oversupply on the oil market may therefore be lower than expected.”