OPEC+ production closer to target than any time in 2024

The Organization of Petroleum Exporting Countries and its allies (OPEC+) June production was closer to targeted production levels than in any of the preceding months in 2024, only exceeding them by 53,000 b/d. “The recent improvement in compliance levels with the OPEC+ cuts show strong commitment and cohesion inside the group. It also shows that the compensation mechanism put into place is working,” said Rystad Energy’s senior vice president of oil market research, Jorge León, in the firms July 8, 2024, update. “I expect to see strong compliance continuing in the coming months.”

As recently as April 2024, OPEC+ undercompliance with its production cuts hit its highest level since April 2021 (399,000 bpd), Rystad said. In May, the group overproduced by 176,000 b/d. Production in June averaged 33.903 million bpd from the OPEC+ countries with a quota (which exclude Mexico), while the target was 33.85 million bpd.

The improved compliance was led by reduced production from OPEC+’s eight voluntary cutters: Oman, Kuwait, the UAE, Algeria, Saudi Arabia, Russia, Iraq and Kazakhstan. Other OPEC+ countries—Sudan, South Sudan, Nigeria, Gabon, Equatorial Guinea, Congo-Brazzaville, Bahrain, Azerbaijan, Brunei and Malaysia—continued to over comply with the cuts, according to Rystad.

The decline in production was mainly due to lower output in Russia (173,000 b/d) and the UAE (76,000 b/d), which overmatched increases from Brunei (45,000 b/d) and Nigeria (39,000 b/d).