OPEC’s oil production dropped by 170,000 bpd from April to 30.09 million bpd in May—the lowest level since February 2015, as Saudi Arabia cut its oil output even deeper despite the end of the U.S. sanction waivers for Iranian oil customers, according to the monthly S&P Global Platts survey.
According to the survey that measures well-head crude oil production in each OPEC state, the cartel’s largest producer Saudi Arabia further slashed its production in May—by 120,000 bpd from April to 9.7 million bpd last month. This was the lowest Saudi oil production in four and a half years, according to Platts estimates.
At the end of May, a Reuters survey showed at that although OPEC’s oil production dropped to a 2015 low of 30.17 million bpd in May, Saudi Arabia boosted its production by 200,000 bpd. This rise in Saudi supply, however, was unable to offset an even larger production decline in Iran after the U.S. removed all sanction waivers at the beginning of May.
After the U.S. choked off more Iranian supply with the end of the waivers, Saudi Arabia appears to have lifted its oil supply by 200,000 bpd to 10.05 million bpd, according to the monthly Reuters survey that tracks supply to the market from shipping data and sources at OPEC, oil companies, and consulting firms. Related: Why Is China Pouring Money Into The Arctic?
Yet, even with the 200,000-bpd boost in May estimated by Reuters, Saudi Arabia was comfortably below its 10.311-million-bpd cap under the OPEC+ deal as it had been overachieving in its share of the cuts by 500,000 bpd in the previous months.
The Platts survey showed that the Saudis appear to have cut deeper last month, despite the end of the U.S. waivers for Iranian buyers and the opportunity to increase the Saudi market share at the expense of Iran.
OPEC will release its official crude oil production data for May in the Monthly Oil Market Report (MOMR) on Thursday, June 13, weeks before OPEC and allies are set to discuss the fate of their production cut pact currently expiring at the end of June.
OPEC is close to reaching an agreement to extend the deal beyond June, Saudi Energy Minister Khalid al-Falih said last week.
By Tsvetana Paraskova for Oilprice.com
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