CIBC EQUITY RESEARCH
November 30, 2023 Flash Research
Reconfirmed Existing Plan, Additional 2.2
MMBbl/d Voluntary Cuts
Brazil Joins OPEC+; Quota Adjustments To African Countries
The 36th OPEC+ ministerial meeting reconfirmed its existing plan and several
OPEC+ countries announced additional voluntary cuts totalling 2.2 MMBbl/d
to the end of March 2024. In addition, Russia will extend its voluntary export
cut of 0.5 MMBbl/d, including 0.3 MMBbl/d of crude oil and 0.2 MMBbl/d of
refined products. The post-meeting note also indicated that Brazil will join
OPEC+ starting January 2024, and that the completion of the production
assessment of Angola, Congo, and Nigeria suggests a slight downward
adjustment of 49 MBbl/d among these three countries in 2024.
• Brazil will join the OPEC+ alliance starting on January 2024. Brazil,
which produces mostly medium-sweet crude from its offshore
operations, currently produces ~3.2 MMBbl/d of crude oil. There was no
discussion of Brazil’s quota at the 36th ministerial meeting.
• Completion of the production assessment of Angola, Congo, and
Nigeria. The 36th ministerial meeting was postponed from November 26,
as there was a dispute between Saudi Arabia and its allies over African
members’ output quotas. The assessment suggests the production
levels the three countries can achieve in 2024 are Angola at 1,100
MBbl/d, Congo at 277 MBbl/d, and Nigeria at 1,500 MBbl/d. This
suggests a 49 MBbl/d quota reduction among the three countries in
2024. OPEC+ in its previous post-ministerial meeting note indicated that
the three countries’ production could be updated to equal the average
production that can be achieved in 2024.
• The next ministerial meeting is scheduled for June 1, 2024. We
suspect OPEC+ will continue to watch economic conditions keenly. The
bar chart in Exhibit 1 shows OPEC member country production levels
and their respective peak production levels, and Exhibit 2 contains area
charts showing OECD inventories over the past five years