The OPEC+ group boosted its oil production in July and increased the overproduction above its implied target as the three producers that have pledged to compensate for exceeding quotas continued to pump well above their respective ceilings, according to the Platts OPEC+ survey from S&P Global Commodity Insights.
OPEC+ saw its total crude oil production rise by 160,000 barrels per day (bpd) last month compared to June, to 41.03 million bpd, the Platts survey found.
That’s 437,000 bpd over the total target for July and a jump from overproduction of 229,000 bpd in June, according to the survey.
OPEC’s Iraq and non-OPEC producers Kazakhstan and Russia have pledged to compensate for their overproduction in previous months.
The OPEC Secretariat said last month that it had received compensation plans from Iraq, Kazakhstan, and Russia for their overproduced volumes for January to June 2024.
The cumulative overproduction in these six months was about 1.184 million bpd for Iraq, 620,000 bpd for Kazakhstan, and 480,000 bpd for Russia, OPEC said.
Iraq and Kazakhstan planned to begin compensating in July with an additional cut of 70,000 bpd from Iraq and 18,000 bpd from Kazakhstan.
Russia’s plan envisages Moscow beginning to compensate in October 2024 and mostly compensating for its overproduction in the months from March to September 2025.
Russian Deputy Prime Minister Alexander Novak said at the end of July that there is no discord between Russia and OPEC+ over Moscow’s recent poor compliance with the group’s production cuts.
Russia’s Energy Ministry has also said that the country remains fully committed to the OPEC+ agreement. Russia exceeded production volumes in June, but output has declined in each month since April, per estimates from independent sources approved by the OPEC+ agreement, the ministry said.
OPEC-only crude oil output was estimated by the Reuters monthly survey at 26.70 million bpd in July, an increase of 100,000 bpd from June, due to higher Saudi supply and small increases from other producers, including Iraq.
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By Charles Kennedy for Oilprice.com
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