LONDON (Reuters) – OPEC oil production reached its lowest level in two decades in May, when Saudi Arabia and other members began providing a record cut in supply, a Reuters survey found, although Nigeria and Iraq are late in doing their part in the reduction.
ARCHIVE PHOTO: A 3D printed oil pump jack is seen in front of the Opec logo shown in this photo, April 14, 2020. REUTERS / Dado Ruvic / Illustration / Photo from the archive
On average, the 13-member Organization of Petroleum Exporting Countries pumped 24.77 million barrels per day (bpd) this month, according to the survey, down 5.91 million bpd from the revised April figure. .
OPEC and its allies last month agreed to a cut in production to offset a drop in demand and prices caused by the coronavirus crisis. Reducing government blockages and lower supplies helped the price of LCOc1 oil more than double, compared to the 21-year low below $ 16 a barrel in April.
"OPEC started off strong in May with its last production cut, reducing supply by 5 million bpd compared to April," Daniel Gerber, chief executive of Petro-Logistics, who evaluates OPEC's offer by tracking tanker shipments.
“However, compliance is far from perfect. With less than four weeks between adoption and the start of the contract, many countries had already committed volumes to buyers and were unable to reduce supply to agreed levels. "
OPEC and its allies, known as OPEC +, have agreed to reduce supply by a record 9.7 million bpd from May 1. OPEC's share, to be made by 10 members of its October 2018 production in most cases, is 6.084 million bpd.
So far, in May, they have delivered 4.48 million bpd of the promised reduction, equivalent to 74% compliance, according to the survey.
LOWEST SINCE 2002
May production would be the lowest in OPEC since 2002, excluding changes in members since then, according to Reuters research records. PRODN TOTAL
The biggest drop in supply came from Saudi Arabia, which reached a record 11.7 million bpd in April. Saudi supply is expected to fall further in June.
The United Arab Emirates and Kuwait have also reduced significantly, sources said. Both had also reached record rates in April.
Iraq, which was delayed in making cuts in 2019, restricted production according to the survey following the reduction in exports from the south of the country, although at 38% its compliance was much less than that of OPEC members in the Gulf.
Another latecomer, Nigeria, made only 19% of the promised reduction, according to the survey.
Venezuela and Iran reduced production in May, while Libya's supply was steady. All three were exempt from voluntary cuts because of U.S. sanctions or internal issues that limit production.
Iran is seeing a drop in fuel consumption because of the coronavirus outbreak, exacerbating the impact of supply sanctions. Venezuela, contesting US sanctions and a long-term decline in production, recorded another drop in exports.
Libyan oil production has declined since January 18 due to a blockade of ports and fields by groups loyal to eastern commander Khalifa Haftar. Production averaged 100,000 bpd in May, the survey found.
The Reuters research aims to track supply to the market and is based on shipping data provided by external sources, data from Refinitiv Eikon flows, information from tanker trackers like Petro-Logistics and Kpler and information provided by sources from shipping companies. oil, OPEC and consultants.
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