OPEC Oil Output Set For Drop Despite Saudi Production Boost

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OPEC’s oil production dropped to a 2015 low of 30.17 million bpd in May. as a major 200.000-bpd increase in Saudi Arabia’s production was unable to offset an even larger production decline in Iran after the U.S. removed all sanction waivers for Iranian buyers.

After the U.S. choked off more Iranian supply with the end of the waivers. Saudi Arabia appears to have lifted its oil supply by 200.000 bpd to 10.05 million bpd. according to the monthly Reuters survey that tracks supply to the market from shipping data and sources at OPEC. oil companies. and consulting firms.

Yet. even with the 200.000-bpd boost in May. Saudi Arabia is comfortably below its 10.311-million-bpd cap under the OPEC+ deal as it had been overachieving in its share of the cuts by 500.000 bpd in the previous months.

Despite the increased supply from Saudi Arabia. OPEC’s overall production was down in May by 60.000 bpd from April. as oil supply from two of the producers exempted from the cuts plunged. Iran’s oil supply dropped by 400.000 bpd month on month. while Venezuela saw another 50.000-bpd decline amid the U.S. sanctions and continuously plummeting oil production in a severe economic crisis.

Among other OPEC nations. production in Nigeria dropped as some pipeline flows and exports were disrupted and under force majeure for extended periods in May.

The OPEC producers bound by the pact met 96 percent of the targeted production cuts in May. down from 132 percent in April. as Saudi Arabia. Angola. and Iraq increased output. according to the Reuters survey.

According to OPEC’s official figures. the cartel’s crude oil production in April dropped by just 45.000 bpd. despite continued deep cuts by the largest producer. Saudi Arabia. and continued decline in Venezuela and Iran.

OPEC will release its official crude oil production data for May in the Monthly Oil Market Report (MOMR) on Thursday. June 13. two weeks before OPEC and allies are set to discuss the fate of their production cut pact currently expiring at the end of June.