OPEC’s 13 members pumped 26.19 mbd in June, up 480,000 bpd from May, mostly due to Saudi Arabia’s continued unwinding of its voluntary extra production cut.
The group’s nine non-OPEC partners, led by Russia, produced 13.27 mbd, a rise of 60,000 bpd from May.
Despite the production gains, higher quotas for the month meant OPEC+ compliance was at 110.16% compared to 111.45% in May, the survey found.
The coalition has now added 970,000 bpd in the past two months, as parts of its plans to relax its output quotas to meet the growing demand for its oil.
But a bitter feud between emerging rivals Saudi Arabia and the UAE could put an end to that, with a deal to raise output by two mbd between August to December in jeopardy.
The dispute, which a week of negotiations has so far failed to resolve, could cause the OPEC+ alliance to leave quotas flat after July, potentially squeezing an already tightening market through the rest of the summer.
But it could also lead to sliding compliance, if not an outright price war, if the dispute escalates, some analysts said.
Ministerial talks are currently suspended, with the UAE not budging from its stance that its output target should be revised as a condition of continuing the OPEC+ supply management pact to the end of 2022 and Saudi Arabia insisting that the production rises and the extension remain tied together, according to delegates.
Saudi opens the taps
Saudi Arabia accounted for a massive chunk of the June increase, boosting output by 470,000 bpd, as it stepped up the unwinding of its extra one mbd production cut.
The country produced 8.97 mbd in June, 377,000 bpd below its official quota of 9.347 mbd. Crude exports were down slightly in June, but domestic refining runs and direct crude burn rose sharply due to seasonal demand, according to the survey.
Saudi Arabia has promised to further ratchet back its extra cut by a final tranche of 400,000 bpd in July, as it responds to stronger demand from its key oil buyers.
Take away the Saudi voluntary cut, and OPEC+ quota compliance would fall to 107.38%, according to Platts calculations.
Compliance laggards step up
Meanwhile, thanks to more generous quotas, compliance from key members such as Russia, Iraq and Nigeria improved.
The OPEC+ group’s largest producer Russia tightened its compliance to 97% in June, its highest monthly compliance rate since February, the survey found.
Russian crude output averaged 9.51 mbd in June, unchanged from the previous month, the survey showed. Despite an increase in crude exports, production remained steady as some of its oil pipelines were shut briefly for maintenance.
Iraq’s compliance to its OPEC+ quotas, which have come under question in recent years, improved sharply, rising to 102%. June crude production fell to 3.94 mbd on the back of lower exports and declining oil stocks.
Iran hits two-year high
The group’s exempt members — Iran, Libya and Venezuela — added a combined 70,000 bpd in June.
Iran pumped 2.48 mbd last month, an increase of 50,000 bpd from May and its highest production since April 2019.
Despite a steady recovery in its oil production, Iran’s exports remain subject to draconian US sanctions, and the OPEC member has built up a significant amount of oil on floating storage.
Efforts to restore a nuclear deal with the US have still not borne fruit.
Meanwhile, Libya and Venezuela added 10,000 bpd each in June, producing 1.16 mbd and 550,000 bpd, respectively, the survey found.
The Platts figures, which measure well-head production, are compiled by surveying oil industry officials, traders and analysts, as well as reviewing proprietary shipping, satellite and inventory data.