OPEC’s oil production jumped to a 2018 high in July, as Saudi Arabia and its close Gulf allies boosted production, a Reuters survey showed on Monday.
OPEC’s production was also increased due to the acceptance of a new member, the Congo Republic, which has been a member now for more than a month.
According to the survey, OPEC’s crude oil production rose by 70,000 bpd from June to stand at 32.64 million bpd in July—the highest production level for 2018 so far.
At the end of June, Saudi Arabia and Russia had OPEC and its Moscow-led non-OPEC partners agree to cut compliance rates to 100% from the very high compliance of more than 150% in previous months. According to Saudi Arabia, the cut in compliance would translate into a production boost of around 1 million bpd by OPEC and its non-OPEC partners. The Saudis and their Gulf allies the United Arab Emirates (UAE) and Kuwait, plus non-OPEC Russia, are basically the only oil-producing countries part of the deal capable of boosting their oil production.
According to the Reuters survey, Saudi Arabia’s production in July so far has been 10.65 million bpd, up from 10.60 million bpd in June, but exports were close to June’s levels because the Saudis increased domestic use at power plants and refineries.
Kuwait and the UAE have increased their respective production by 80,000 bpd and 40,000 bpd this month, following the OPEC+ decision to boost output.
Production in Nigeria has also recovered after Shell lifted the force majeure on Bonny Light exports, and Iraq also increased its exports from the southern oil ports.
The biggest drop in production was in Iran—by 100,000 bpd, as U.S. sanctions loom, serving as a deterrent for buyers, the Reuters survey found.
The other OPEC members with drops in production were Venezuela, Angola, and Libya, according to the survey.
OPEC’s compliance rate dropped to 111% in July from a revised 116% in June, still above the 100% compliance rate agreed upon at the June meeting.
Saudi Arabia had opened the taps even before the agreement to ease the production cuts to respond to the high oil prices and supply disruptions, judging from OPEC’s Monthly Oil Market Report that showed the Saudis boosted their oil production in June by more than 400,000 bpd.
Source Credit: Oil Price