OPEC failed to deliver on an increase in oil production promised under a deal with allies in June, a Reuters survey found on Friday, as involuntary declines in Libya and Nigeria pushed Saudi Arabia’s supply surge. and other major producers compensated.
The Organization of the Petroleum Exporting Countries (OPEC) pumped 28.52 million barrels per day (bpd) in June, the survey found, 100,000 bpd lower than the revised May total. OPEC planned to increase production by about 275,000 barrels per day in June.
OPEC plus Russia and other allies, known as OPEC+, are lifting production restrictions for 2020 due to the pandemic, although many are struggling to do so. OPEC+ held on to its planned production increase for August during a meeting on Thursday.
The deal called for a 432,000 bpd increase in June from all OPEC+ members, of which about 275,000 bpd is shared by the 10 OPEC producers covered by the agreement. The supply of the 10 rose by just 20,000 bpd, the survey found.
According to Reuters surveys, production fell short of promised increases between October and April, with the exception of February, as many producers lack the capacity to pump more due to insufficient investment, a trend accelerated by the pandemic.
As a result, the 10 OPEC members are pumping far less than required under the deal. OPEC compliance with austerity commitments was 253% in June, the survey found, up from 178% in May.
The biggest drop was in Libya, where supply fell by 170,000 bpd as unrest continued to curb the country’s production. Libya is one of the members exempt from voluntary austerity.
The second largest drop of 80,000 bps came from Nigeria, where outages and maintenance slowed production. Refinitiv figures dropped exports by at least 100,000 bpd in June, as did two other sources in the study tracking flows.
Iraqi supplies also fell, with sources in the study citing lower exports.
Saudi Arabia, the United Arab Emirates and Kuwait added 130,000 bpd together. Saudi Arabia’s production was more than 100,000 barrels per day under quota, according to the survey.
Production in Iran and Venezuela, the other two exempted producers, also increased.
The Reuters survey aims to track the offerings to the market. It is based on shipping data from outside sources, Refinitiv Eikon flow data, information from tanker trackers such as Petro-Logistics, as well as information from sources at oil companies, OPEC and consultants.