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OPEC+ slashed its crude oil production by 670,000 barrels per day (bpd) in May, as the voluntary cuts with which the group shocked the markets in April began, the latest Platts survey by S&P Global Commodity Insights showed on Friday.
In early April, a day before a regularly scheduled OPEC+ panel meeting, the biggest OPEC producers in the Middle East and several other members of the OPEC+ pact announced a total of 1.16 million bpd of fresh production cuts between May and December 2023.
The reduction is on top of Russia’s current 500,000 bpd cut, which was extended until the end of the year. In those OPEC+ cuts, Saudi Arabia said it would reduce its crude oil production by 500,000 bpd and said that the move was “a precautionary measure aimed at supporting the stability of the oil market.”
At the latest OPEC+ meeting on June 4, the voluntary cuts were extended through 2024, while Saudi Arabia announced a unilateral production cut of 1 million bpd for July, which could be extended beyond next month.
So, at the start of the fresh cuts in May, OPEC’s crude oil production fell by 440,000 bpd to 28.16 million bpd, while non-OPEC producers saw output drop by 230,000 bpd to 13.17 million bpd, according to the Platts survey.
Saudi Arabia strictly complied with its pledge to cut 500,000 bpd beginning in May, and its production averaged 10 million bpd last month, per the survey.
The Reuters survey from last week also found that Saudi Arabia and the other major Gulf producers that had pledged cuts from May stuck to their commitments. Saudi Arabia, Kuwait, and the UAE largely implemented their announced cuts last month, the Reuters survey of OPEC’s production found.
Iraq, another key OPEC producer that has promised cuts, was well below quota in May – as it was in April – because of the ongoing dispute over Kurdistan’s crude oil exports from the Turkish port of Ceyhan, which has shut-in production in the semi-autonomous region, both the Platts and Reuters surveys found.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com