Daily Management Review

OPEC fails to fully implement oil production deal


According to a June report from OPEC, oil output fell by 176,000 bpd to 28.51 million bpd in May from April levels, and the organization failed to boost production by the entire amount authorized in the reporting month under the OPEC+ deal, surpassing the agreement by 96 percent.

"In May 2022, OPEC's total oil output averaged 28.51 million barrels per day, down 176,000 barrels per day from the previous month. The United Arab Emirates, Saudi Arabia, and Kuwait produced more oil, whereas Libya, Iraq, Nigeria, Iran, and Gabon produced less," the paper reads.

According to OPEC figures, the organization reduced output by 2.142 million bpd compared to October 2018, the baseline for the OPEC+ oil production restriction agreement. This is 1.047 million bpd more than the alliance's 10 member nations' obligations. As a consequence, in May, OPEC met the agreement by 196 percent. The deal was 162 percent completed in April.

Due to a decline in oil demand caused by the COVID-19 pandemic, OPEC+ lowered oil output by 9.7 million bpd in May 2020. The agreement's provisions were then tweaked multiple times. As a result, starting August 2021, the partners have raised monthly output by 400 thousand barrels per day.

source: opec.org