OPEC’s Oil Production Drops As Cartel Undershoots Target Again
OPEC’s crude oil production fell in June compared to May, due to outages in Libya and Nigeria, and the 10 cartel producers bound by the OPEC+ pact lifted their combined production by just 20,000 barrels per day (bpd) last month, the monthly Reuters survey showed on Friday.
OPEC’s all 13 members—including Libya, Iran, and Venezuela that are exempted from the pact—saw their collective production drop by 100,000 bpd month over month in June, to 28.52 million bpd, according to the survey. Under the OPEC+ pact, OPEC-10 targeted to increase its production in June by 275,000 bpd. Instead, they lifted their output by just 20,000 bpd.
Saudi Arabia, the United Arab Emirates (UAE), and Kuwait boosted their combined output by 130,000 bpd in June, showed the Reuters survey of shipping data providers and sources at OPEC and oil companies.
However, even Saudi Arabia, OPEC’s biggest producer and the world’s top crude oil exporter, pumped more than 100,000 bpd below its quota, the survey found.
Saudi Arabia’s target for June was 10.663 million bpd.
In June, Libya—not part of the OPEC+ deal—saw the largest decline in production, followed by Nigeria, where output is estimated to have dropped by between 80,000 bpd and 100,000 bpd last month.
Production and exports from Iraq, OPEC’s second-largest producer, also fell, according to the Reuters survey.
This survey and other shipping data suggest that OPEC continues to underperform in its collective production target and supply to the market is much lower than the nominal monthly increases the OPEC+ group has claimed to be doing.
In May, OPEC+ was estimated to be falling behind its overall production target by a massive 2.695 million bpd due to Western sanctions on Russia and capacity constraints at several other producers unable to pump to quotas.
Earlier this week, OPEC+ confirmed a 648,000 bpd production hike for August, with which it will have effectively rolled back all the cuts it started in May 2020 in response to the crash in demand.