OPEC oil output rose in July to its highest since April 2020, a Reuters survey found, as the group further eased production curbs under a pact with its allies and top exporter Saudi Arabia phased out a voluntary supply cut.
The Organization of the Petroleum Exporting Countries has pumped 26.72 million barrels per day (bpd), the survey found, up 610,000 bpd from June’s revised estimate. Output has risen every month since June 2020 apart from in February.
OPEC and allies, known as OPEC+, have been unwinding record output cuts agreed in April 2020, as demand and the economy recover. With oil prices rising to a 2 1/2-year high, OPEC+ decided this month on further hikes from August.
“Most forecasts are still predicting robust growth in demand in the second half of the year,” said Carsten Fritsch of Commerzbank. “It is easy to believe that the oil market has learnt to live with the virus, in other words.”
The OPEC+ agreement allows for a 360,000 bpd increase in OPEC output in July versus June, while Saudi Arabia had pledged to add 400,000 bpd as the final step in a plan to unwind a 1 million bpd voluntary cut it made in February, March and April.
The 13-member OPEC has slightly under-delivered on the expected month-on-month rise, the survey found. Members’ adherence to pledged cuts declined but the group was still pumping less than called for under the latest deal.
OPEC compliance with pledged cuts was 115%, the survey found, versus a revised 118% in June.
Saudi Arabia delivered the biggest increase in July of 460,000 bpd, as it further unwound its voluntary cut and raised output as part of the July 1 OPEC+ boost.
The second-biggest came from the United Arab Emirates, which added 40,000 bpd in line with its new quota. Kuwait and Nigeria each added 30,000 bpd, the survey found, while output in OPEC’s No. 2 producer Iraq edged up by 20,000 bpd.
Iran, which has managed to raise exports since the fourth quarter despite U.S. sanctions, has not provided a further boost this month, the survey found. The country is exempt from OPEC supply curbs due to the sanctions.
A U.S. official said last week the United States was considering cracking down on Iranian oil sales to China, the top destination. Talks with world powers to revive Tehran’s 2015 nuclear deal are on hold.
Among the other two producers exempt from curbs, Venezuela managed to pump more while Libyan output was steady.
The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from tanker trackers such as Petro-Logistics and Kpler, and information provided by sources at oil companies, OPEC and consultants.