US Sanctions Hit OPEC Output Despite Saudi Boost
Top oil exporter Saudi Arabia has raised production in May, a Reuters survey found, but not by enough to compensate for lower Iranian exports which collapsed after the United States tightened the screw on Tehran.
The 14-member Organization of the Petroleum Exporting Countries pumped 30.17 million barrels per day in May, down 60,000 bpd from April and the lowest OPEC total since 2015.
The survey suggests that even though Saudi Arabia is raising output following pressure from US President Donald Trump to bring down prices, the kingdom is still voluntarily pumping less than an OPEC-led supply deal in place this year allows it to.
“We are seeing OPEC supply falling in May to its lowest in numerous years,” said an industry source who monitors OPEC output. “There are not many big increases this month, and lots of countries posting lower supply.”
Despite lower supplies, crude oil has fallen from a six-month high above $75 a barrel in April to below $68 on Thursday, pressured by concern about the economic impact of the US-China trade dispute.
An OPEC delegate said most countries had kept a lid on output in May, although they might have sought to boost sales in the faster-growing Asian market.
“Producers may change the portfolio to target Asia but not increase production generally,” he said.
OPEC, Russia and other non-members, an alliance known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from January 1. OPEC’s share of the cut is 800,000 bpd, to be delivered by 11 members - all except Iran, Libya and Venezuela.
source: Financial Tribune
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