LONDON: The increase in OPEC oil output in May exceeded the rise planned under a deal with allies for the first time since February, a Reuters survey found, as higher Saudi and Iraqi supply combined with a partial recovery in outage-hit Nigeria.
The 10 members of the Organization of the Petroleum Exporting Countries (OPEC) bound by the deal pumped 24.73 million barrels per day (bpd) in May, the survey found, up 280,000 bpd from April and above the 274,000 bpd increase called for by the accord.
OPEC and its allies, known as OPEC+, are slowly relaxing 2020 output cuts as demand recovers from the pandemic. OPEC+ meets on Thursday and is expected to confirm a previously agreed output hike despite the surge in oil prices after Russia’s invasion of Ukraine.
“Confirming the plan is likely as there is no reason not to do so,” an OPEC+ delegate said of Thursday’s meeting.
The deal called for a 432,000 bpd increase in May from all OPEC+ members, of which about 274,000 bpd is shared by the 10 OPEC producers the agreement covers.
Output undershot the pledged hikes between October and April, with the exception of February, according to Reuters surveys, as many producers lack the capacity to pump more crude following insufficient investment, a trend accelerated by the pandemic.
As a result, the 10 OPEC members are pumping far less than called for under the deal. OPEC compliance with pledged cuts was 178%, the survey found, compared with 164% in April.
Total OPEC production rose by 170,000 bpd to 28.76 million bpd, the survey found. Declines in Libya and Iran, which are both exempt from the OPEC+ deal, reduced the total.
The biggest rise in May of 100,000 bpd came from Saudi Arabia, the survey found.
The second-largest of 70,000 bpd came from Nigeria, which loading schedules indicate boosted exports in May, even though key crude stream Bonny Light remains under force majeure.
Kuwait and Iraq provided smaller increases of 40,000 bpd and 30,000 bpd respectively, while the United Arab Emirates added 20,000 bpd.
Production did not increase in Congo, Equatorial Guinea and Gabon, the survey found, owing to a lack of capacity.
The biggest decline was in Libya, where supply dropped by 70,000 bpd as unrest continued to curb the country’s output.
Output in Iran also fell. Exports declined, sources in the survey said, in part because Iran has shipped less oil to China since the start of the Ukraine war as Beijing favoured cheaper Russian crude.
Production in Venezuela, the third exempt producer, continued to edge higher.
The Reuters survey aims to track supply to the market. It is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from tanker trackers such as Petro-Logistics, as well as information provided by sources at oil companies, OPEC and consultants.