In a surprising move, the Organization of the Petroleum Exporting Countries (OPEC) increased oil production in June, defying expectations set by their output cut extension agreement.
This marks the second consecutive month of rising output, despite efforts from OPEC+ to bolster the market.
The Reuters survey, based on shipping data and industry sources, revealed OPEC pumped 26.70 million barrels per day (bpd) last month, a 70,000 bpd increase compared to May.
This comes after OPEC+ agreed to extend most production cuts until the end of 2025 to support the market amidst concerns about sluggish demand growth, rising interest rates, and increasing U.S. production.
The rise in output can be attributed to several factors.
Nigeria boosted production by 50,000 bpd, while Iran and Algeria also saw smaller increases as oilfield maintenance wrapped up.
However, the largest drop came from Iraq, which saw a decrease of 50,000 bpd, although they remain above their designated OPEC+ target.
The survey further revealed that OPEC members collectively exceeded their implied production target by roughly 280,000 bpd, with Iraq contributing significantly to this surplus.
Amongst those not bound by production cuts, Iran stands out.
Their output reached 3.2 million bpd, matching their highest level since 2018.
Additionally, Iranian Oil Minister Javad Owji reportedly stated that Iran is now selling crude oil to 17 countries, potentially hinting that some nations might be disregarding the remaining U.S. sanctions.
The Reuters survey plays a crucial role in monitoring oil supplied to the market.
It gathers data from various sources, including external shipping data, LSEG flow information, industry flow trackers like Petro-Logistics and Kpler, along with insights from oil companies, OPEC itself, and consultants.
