OPEC + oil production rose marginally last June, despite the decline in Russian production as part of Moscow’s pledges to cut production.
A recent survey showed that the OPEC + alliance kept its crude oil production almost unchanged in June, amid anticipation of production levels in July, with the implementation of large additional cuts by Saudi Arabia and Russia, which will extend until next August.
OPEC+ production rose by 10,000 bpd to 41.34 million bpd, according to the latest survey by S&P Global Platts.
The OPEC+ production surge followed a significant drop of 670,000 barrels per day in May to a 19-month low, with eight countries joining Russia in approving voluntary cuts, which are set to remain in place until the end of 2024.
OPEC+ cuts
Saudi Arabia announced an additional cut of 1 million bpd at least in July and August, while Russia, which has pledged to cut 500,000 bpd, said it would cut crude oil exports by 500,000 bpd in August.
The OPEC + alliance is working to reduce production in an attempt to support the stability of the oil market, which is still suffering from weak global economic indicators.
OPEC+ ministers will not meet to discuss market conditions and production volumes until November 26, but said they remain ready for an extraordinary meeting before then, if market conditions warrant.
Starting in May, 9 countries in the Saudi-led OPEC+ coalition introduced voluntary cuts, totaling 1.66 million barrels per day, in an effort to stabilize oil markets; This raised the total production cuts by the coalition to 3.6 million barrels per day.
The following infographic, prepared by the specialized energy platform, reviews the numbers of voluntary production cuts by 9 countries from the OPEC + alliance:
OPEC oil production
The 13 OPEC nations increased their production by 70,000 bpd in June to 28.23 million bpd, led by modest increases in Iran, Iraq, Nigeria and Venezuela.
Iran has seen its production expand in recent months, with market sources saying exports have risen sharply, in a possible sign that the United States is easing sanctions enforcement.
During June, Iran’s oil production increased by about 50 thousand barrels per day to 2.71 million barrels per day, compared to 2.66 million barrels per day last May.
Venezuela also benefits from US sanctions relief, as its diluted imports help boost its heavy oil production.
Caracas pumped about 30,000 barrels more last month, raising its production to 800,000 barrels per day, compared to 770,000 barrels last May.
Saudi Arabia’s oil production
The survey showed that Saudi Arabia, the largest OPEC member, produced 9.99 million barrels per day in June, 12,000 barrels more than its share in OPEC+.
Saudi production has not been this low since December 2021, as the additional cuts implemented for July and August will reduce production to levels last seen in 2011.
And Saudi Arabia announced the extension of the voluntary production cut of one million barrels of oil per day, which began to be implemented in July, to next August.
According to the Kingdom’s commitment to voluntary reduction, Saudi Arabia’s oil production, in August 2023, is scheduled to reach approximately 9 million barrels per day.
The reduction of one million barrels per day is scheduled to be added to the voluntary cut previously announced by Saudi Arabia in April 2023, which extends until the end of December 2024.
Russian cuts
OPEC oil production growth was partially offset by a 60,000 bpd drop from non-OPEC coalition members, who collectively pumped 13.11 million bpd.
Russia, the largest non-OPEC producer, saw production drop by 30,000 barrels per day, to 9.42 million bpd, the lowest level since April 2022, when Western countries began turning away from Russian barrels, as the war in Ukraine escalated.
This brings Russia closer to the first voluntary cut target of 500 bpd from February levels, as the Platts survey estimated Russian production at 9.86 mb/d in February, used as a baseline for the voluntary cut target of 500,000 bpd.
In addition to Russia, Malaysia and Oman saw a decline in non-OPEC production.
Including voluntary cuts, the OPEC+ production shortfall against quotas was about 1.1 million barrels per day, with a compliance rate of 118.63%.
It is noteworthy that the Platts survey monitors wellhead production numbers, which are collected using information from oil industry officials, traders and analysts, in addition to reviewing private shipping, satellite and inventory data.
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