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OPEC and its allies kept their crude oil output almost unchanged in June, with deep production cuts in force and additional curbs by Saudi Arabia and Russia scheduled in the weeks ahead.
OPEC+ production edged up 10,000 b/d to 41.34 million b/d, according to the latest Platts survey by S&P Global Commodity Insights.
This followed a sizeable 670,000 b/d drop in May to a 19-month low, with seven countries joining Russia in introducing voluntary cuts. These cuts will remain in force until the end of 2023.
Saudi Arabia announced a further 1 million b/d cut for at least July and August, while Russia, which had already pledged a 500,000 b/d cut, said that it would lower crude oil exports by 500,000 b/d in August.
The group is cutting production in a bid to tighten the market and shore up oil prices, which continue to be weighed down by weak global economic indicators. OPEC+ ministers are not due to meet to discuss market conditions and production volumes until Nov. 26 but have said they remain on standby for an extraordinary meeting before then if market conditions warrant.
OPEC's 13 countries increased their output by 70,000 b/d in June to 28.23 million b/d, 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 substantially -- a possible sign that the US is relaxing sanctions enforcement. Venezuela is also benefitting from looser US sanctions, with imports of diluent helping boost its heavy oil output.
OPEC's biggest member, Saudi Arabia, produced 9.99 million b/d in June, slightly above its quota, the survey showed. Saudi production has not been this low since December 2021, and the additional cut it is implementing for July and August will take it down to levels last seen in 2011, not including the pandemic years and the September 2019 drone attack on the Abqaiq crude processing facility.
Growing OPEC production was partially offset by a 60,000 b/d drop from non-OPEC members of the coalition, which pumped a collective 13.11 million b/d.
The largest non-OPEC producer, Russia, saw output fall by 30,000 b/d to 9.42 million b/d -- its lowest since April 2022, when Western countries began shunning Russian barrels as the war in Ukraine ramped up.
This brings Russia closer to its first voluntary cut target of 500,000 b/d from February levels. The Platts survey assessed Russian production at 9.86 million b/d in February.
In addition to Russia, Malaysia and Oman saw output fall among the non-OPEC contingent.
Including the voluntary cuts, the shortfall in OPEC+ production against quotas was 1.1 million b/d -- a compliance rate of 118.63%.
OPEC members Iran, Libya and Venezuela are exempt from quotas.
The Platts survey figures measure wellhead production and are compiled using information from oil industry officials, traders and analysts, as well as reviewing proprietary shipping, satellite and inventory data.
OPEC+ crude oil production
|OPEC-10 + NON-OPEC||Jun-23||Change||May-23||Quota||over/under|
Unit: million b/d
Source: Platts OPEC+ survey by S&P Global Commodity Insights
Note: Quotas include voluntary extra cuts implemented by Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, Oman and Gabon