OPEC+ added 610,000bpd to oil market in June - Report

The Organisation of Petroleum Exporting Countries (OPEC) and its allies OPEC+’s crude production rose by over 600,000 b/d last month as quotas increased and Saudi Arabia further unwound its additional cut.

Argus estimated that OPEC members, including those not participating in the supply restraint pact, added 560,000 b/d to the market in June, with Riyadh accounting for the lion’s share.

Saudi Arabia brought back another 350,000 b/d of the extra 1million b/d cut that it implemented in February to April and plans to restore the remaining 400,000 b/d this month.

Exports failed to match production growth largely because rising temperatures boosted crude demand from the domestic power sector.

Angola saw the second-largest hike among OPEC members after hitting a 16-year low in May. The resumption of Gindungo flows drove a 70,000 b/d increase to 1.14mn b/d last month.

Angolan oil minister, Diamantino Azevedo, said he expects production to average 1.19mn b/d this year, below a previous forecast of 1.22mn b/d.

The revision was underpinned by delays in investment and drilling campaigns caused by last year’s Covid-induced collapse in oil prices as the country averaged 1.13 million b/d in the first six months of this year.

Iran and Venezuela, two of the three OPEC members exempt from the OPEC+ deal, both increased output while Iran’s went up by another 50,000 b/d to 2.44mn b/d as talks to revive the 2015 nuclear deal continued in Vienna. If the negotiations are successful, US sanctions on Tehran’s exports will be lifted.

Analysts estimate Iran’s exports approached 700,000 b/d last month while Venezuela lifted production by 40,000 b/d to 540,000 b/d, the third monthly rise in a row.

Last month’s hike in quotas helped some of the OPEC+ group’s serial overproducers improve compliance while Iraq was below its ceiling for the first time since February, helped by a decline in Basrah exports.

Also, Russia and Kazakhstan, the group’s largest non-OPEC members, kept production flat and Russia raised exports through its Transneft pipeline system by 180,000 b/d last month, but at least part of the jump came from a 40,000 b/d draw from stocks, according to Kpler data.

The countries participating in the OPEC+ deal were 111 per cent compliant with their 35.9mn b/d June output target and have returned 940,000 b/d to the market in the space of two months while the collective quota rises by another 441,000 b/d in July.