OPEC’s crude oil production declined following a fire outbreak at Iraq’s Rumaila oil field in January, according to a Bloomberg report.
The Organization of Petroleum Exporting Countries (OPEC) pumped an average of just over 27 million barrels per day (bpd) last month, a decline of about 70,000 bpd when compared to December.
The decline in Iraq’s oil output offset modest increases in Kuwait and Venezuela, contributing to the overall drop in OPEC production.
A fire erupted at a storage tank at the Rumaila oil field on January 24, temporarily shutting down about 300,000 bpd—approximately 25% of the field’s total capacity—for the following week. Despite swiftly extinguishing the blaze, Iraq’s production fell to just over 4 million bpd, aligning with its OPEC quota. The incident at Rumaila, one of Iraq’s largest oil fields, occurred as the country works to balance its production commitments under OPEC+ output agreements.
Despite Iraq’s production setback, OPEC and its allies, led by Saudi Arabia and Russia, reaffirmed their commitment to keeping a lid on oil supplies until the end of the first quarter of 2025. The coalition remains cautious about flooding the market, particularly amid weakened demand in China and surging alternative supplies from the Americas.
At an online review meeting on Monday, OPEC+ opted to maintain its current production curbs, despite pressure from U.S. President Donald Trump to lower crude prices.
The group continues to assess global demand risks before deciding on any supply adjustments.
Beyond Iraq, the most monthly fluctuations in OPEC’s output came from Kuwait and Venezuela. Kuwait increased production by 60,000 bpd to 2.49 million bpd while Venezuela boosted output by 50,000 bpd, reaching an average of 900,000 bpd.
Meanwhile, Kazakhstan and Russia have pledged to make additional cuts to compensate for exceeding their previous quotas.
OPEC+ is set to gradually revive production in monthly tranches of 120,000 bpd from April 2025, aiming to restore 2.1 million bpd by late 2026.
However, the group has already postponed the plan three times over fears of destabilizing the market and has another month to reconsider the scheduled increase.
With Iraq’s output now closer to its agreed limit than at any time since early last year, the country is yet to begin additional compensatory cutbacks for prior overproduction.
OPEC’s output discipline, coupled with Iraq’s temporary supply loss, is likely to influence global oil prices in the coming weeks.
While the market remains stable, analysts warn that any prolonged disruptions or shifts in OPEC+ supply strategy could trigger volatility.
