OPEC's oil output climbs as Saudis lead pursuit of market share

Malaysian Reserve

3 days ago

OPEC bolstered crude production by the most in four months as Saudi Arabia led a surge of Middle East exports in a bid to reclaim market share, a Bloomberg survey shows.
Riyadh is steering the Organization of the Petroleum Exporting Countries and its partners to revive supplies swiftly despite faltering oil demand and an impending global surplus. The policy is adding downward pressure on crude prices — a potential salve for consumers and a fixation of President Donald Trump.
The Saudis — along with Gulf neighbors Kuwait and the United Arab Emirates — also rushed out oil shipments last month amid fears that the Israel-Iran conflict could disrupt flows through the Persian Gulf and its critical sea corridor, the Strait of Hormuz, though traffic ultimately continued unabated.
READ: Race to Move Oil Sees Flows Leap Above 40 Million Barrels a Day
Production from OPEC's 12 members increased by 360,000 barrels a day in June to an average of 28 million per day, according to the Bloomberg survey. About two-thirds of the hike was provided by the Saudis.
The wider OPEC+ coalition has stunned oil traders in recent months with a pivot from defending crude prices to opening the taps, agreeing to revive production in May, June and July at three times the initially-scheduled pace. Delegates say they plan to discuss another similar-sized hike of around 411,000 barrels a day for August at a video-conference on Sunday.
The latest boost indicates that, after the restraint shown by many members during the first of their accelerated increases in May — when several tried to atone for earlier over-production — the OPEC+ alliance is now committing more fully to the supply revival.
The output flood, coming at a time of slowing demand in China and plentiful output across the Americas, is taking a toll on prices. Brent crude futures traded near $67 a barrel on Wednesday, having slumped 12% last week as a fragile ceasefire between Israel and Iran eased concern over the risk to regional energy exports.
Saudi Arabia raised output by 240,000 barrels a day last month to 9.37 million a day, pumping in accordance with its new target, the survey showed. The addition was complemented by several other OPEC members such as the UAE, Kuwait and Iraq.
Abu Dhabi delivered the second-biggest gain, adding 90,000 barrels a day to pump an average of 3.4 million barrels a day, according to the survey. Iraq raised output by 30,000 to produce 4.21 million a day.
Bloomberg's data indicates both countries are producing considerably above their agreed OPEC+ quotas, but the cartel's own estimates suggest they are pumping broadly in line with their obligations.
The duo are among several members that have pledged extra restraints to make up for previous excess output, with Kazakhstan remaining by far the biggest offender.
Exports from Saudi Arabia, Kuwait and UAE appeared to surge considerably more than production last month, potentially to position supplies away from the regional turmoil.
The three nations loaded 11.9 million barrels a day onto tankers in June, the most in just over two years, ship-tracking data compiled by Bloomberg show. The difference could have been made up by drawing from stockpiles.
Bloomberg's production survey is based on ship-tracking data, information from officials and estimates from consultants Rapidan Energy Group, FGE, Kpler Ltd. and Rystad Energy. –BLOOMBERG