The 14 nation OPEC began its first round of oil supply cuts in December, as oil supplies plunged by 751,000 barrels per day to nearly 31.6 million bpd.
In early December OPEC members signed an agreement with Russia and nine other nations to keep 1.2 million barrels per day off the market starting in January. This move is to prevent another price-crushing oil glut as last experienced in 2014-2016.
Saudi Arabia tops the list of supply cuts. The kingdom's output plunged by 468,000 bpd to just over 10.5 million bpd last month. According to Saudi Energy Minister Khalid al Falih, the Saudis are planning another production cut in January to 10.2 million bpd.
This pullback in OPEC production was occasioned by supply disruptions in Libya and Iran. Output in Libya fell by 172,000 bpd to 928,000 bpd in December, while in Iran, production dropped by another 159,000 bpd to just under 2.8 million bpd. On the other hand, Iraq, OPEC's second largest producer, witnessed the biggest jump in production in the final month of the year as its output rose 88,000 bpd to just over 4.7 million bpd. At the current level, Baghdad would need to cut about 200,000 bpd in January to meet its quota under the supply cut agreement.