The Organization of Petroleum Exporting Countries (OPEC) and its allies have missed production targets, further straining global stockpiles as winter approaches the Northern Hemisphere.
OPEC+ production cuts ran deeper than expected in September, according to members of the alliance. Some members of OPEC, such as Angola and Nigeria, are experiencing difficulties attempting to resume production, facing obstacles ranging from improper maintenance to underinvestment. Libya, which has faced civil war and domestic unrest for a decade since the ousting of dictator Muammar Gaddafi in 2011, suspended the head of the National Oil Corporation amid an ongoing dispute.
According to a recent report by the International Energy Agency, the spare capacity of OPEC+ could drop below 4 million bpd by Q4 of 2022. The figure is drastically lower than Q1 2021's 9 million bpd.
OPEC faces mounting pressure from consumers as energy prices rise worldwide. Japanese Prime Minister Fumio Kishida called on producers to scale production to meet demand. Saudi Oil Minister Prince Abdulaziz bin Salman defended the organization's production plans, stating "I keep telling people we are increasing production."
The pressure posed by OPEC's production misses is causing ripple effects across other divisions of the energy industry, with increasing reliance on alternative fuels prompting supply disruptions and price inflation for both coal and natural gas. Shortages of natural gas have already caused severe price inflation throughout Europe, prompted by a recent decision by Russia not to increase exports.
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