OPEC’s Crude Production Steady While Key Members Flout Quotas

(Bloomberg) -- OPEC’s crude production remained steady for a third month while key members Iraq and the United Arab Emirates continued to pump above their assigned quotas.

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The Organization of Petroleum Exporting Countries produced an average of 26.96 million barrels a day last month, about 60,000 more than in April, according to a Bloomberg survey. Baghdad and Abu Dhabi still haven’t fully implemented supply cutbacks agreed with fellow members at the start of the year.

OPEC and its allies made deeper output curbs earlier this year to offset surging exports from US and Guyana, as well as a shaky economic outlook in top consumer China, in an effort to prop up oil prices. The measures had mixed success, with prices trending lower in the past two months.

At a meeting on Sunday, the OPEC+ coalition outlined plans to gradually unwind these curbs through to late 2025. Brent crude futures sank on Monday below $80 a barrel for the first time since February, as market heavyweights like Goldman Sachs Group Inc. described the planned supply rebound as “bearish.”

Throughout this year’s cutbacks, a particularly fraught issue for the Organization of Petroleum Exporting Countries and its partners has been getting members to follow through on their pledged share.

Iraq pumped 4.24 million barrels a day in May, slightly more than the previous month, failing to either adhere to its agreed limit or make extra “compensation” cuts to atone for earlier cheating. Its output was roughly 290,000 barrels higher than its stipulated target.

Baghdad has chafed for years against output ceilings set by OPEC+ as the country seeks revenue to rebuild an economy shattered by decades of war and sanctions.

The UAE, which has been eager to deploy newly installed production capacity, pumped 3.13 million barrels a day last month, about 218,000 above its target.

Still, OPEC’s official data show Abu Dhabi as compliant with its quota, and the country successfully carved out a special exception to gradually increase output by an additional 300,000 barrels a day in 2025.

Bloomberg’s survey is based on ship-tracking data, information from officials and estimates from consultants, including Kpler Ltd., Rapidan Energy Group and Rystad Energy A/S.

--With assistance from John Deane, Verity Ratcliffe, Andrew Reierson and Lucia Kassai.

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