As agreed in April 2021, OPEC opened the taps in the second quarter of the year to meet a rebound in global oil demand, boosting crude production by 855,000 barrels per day (bpd) in June, the largest output hike in a year, a Bloomberg survey found.
The 13-member organization raised its production to 26.47 million bpd last month, up by 855,000 bpd compared to May, according to the survey based on ship-tracking data, information from officials, and estimates from energy consultancies.
Saudi Arabia, OPEC’s top producer and the world’s top exporter, accounted for more than half of June’s production increase as it hiked its output by 490,000 bpd to 8.95 million bpd, the Bloomberg survey showed.
As per the OPEC+ group’s decision from early April, the collective OPEC+ oil production was set to rise by 350,000 bpd in both May and June and by more than 400,000 bpd in July.
Additionally, Saudi Arabia was also gradually easing its extra unilateral cut of 1 million bpd between May and July, beginning with monthly production increases of 250,000 bpd in both May and June.
Overall, OPEC+ will have returned to the market as much as 2.1 million bpd between May and the end of July.
A similar Reuters survey showed earlier this week that OPEC boosted its production by 740,000 bpd to 26.24 million bpd in June. The estimate of Saudi Arabia’s production increase was similar to the one in the Bloomberg survey. According to the Reuters survey, the Kingdom raised its production by 500,000 bpd in June compared to May.
Judging from the re-opening of economies in the second quarter and the increased fuel demand, especially in the United States, OPEC made the right call back in April to gradually boost supply to the market.
The organization, together with its non-OPEC partners led by Russia, was discussing early on Friday how to proceed with the cuts from August onwards. Disagreements over baseline production levels for the future cuts delayed the meetings from Thursday to Friday last week. Failing to have a consensus among the OPEC members has now shifted the decision to this week.