LONDON: OPEC+ produced 2.695 million barrels per day below its crude oil targets in May because of production problems at several members and as Russia faced sanctions, an OPEC+ document seen by Reuters and citing secondary sources showed on Thursday.
Underproduction by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, was higher in May, when overall compliance with planned output cuts stood at 256%, up from 220% a month earlier.
The development adds to global supply concerns as Brent crude prices in May averaged their highest in a decade close to $123 per barrel, and with June prices hovering just below at an average $118/bbl.
Global demand is recovering from the pandemic and outpacing the abilities of OPEC+ countries to increase production.
Western sanctions on Russian oil following Moscow’s invasion of Ukraine in February have strained Russian crude production growth.
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Russia’s crude output rose to 9.273 mln bpd in May from 9.159 mln bpd in April, but its production levels remained 1.276 mln bpd below target last month, the OPEC+ document showed, the largest deviation across all OPEC+ members.
Supply from the group faces additional challenges in June as a new blockade of Libyan crude oil facilities has greatly reduced the country’s production levels. Libya remains exempt from OPEC oil production quotas.
U.S. president Joe Biden’s administration has pushed OPEC+ to boost production so as not to impair the global economic recovery. But many OPEC+ producers lack the capacity to pump more crude following insufficient investment, a trend accelerated by the pandemic.
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