Opec+ output falls in May

Opec+ crude output by members subject to cuts fell by 110,000 b/d in May as Russia and Kazakhstan made further headway towards meeting their targets.

This left output at its lowest in nearly three years, Argus estimates — at 34.03mn b/d still 110,000 b/d above the group's target for the month, but a marked improvement on the 170,000 b/d overproduction in April.

The nine Opec members subject to cuts were 210,000 b/d above target in May, but this was partially offset by the nine non-Opec members, which produced 100,000 b/d below. The biggest fall came from Russia, which reduced output by 180,000 b/d to 9.11mn b/d as it continues to replace a pre-existing export cut pledge with an output cut. Still, it remained 60,000 b/d above its new target for that month.

More output falls from Russia are expected, particularly given its pledge to compensate for recent overproduction. The story is similar for Kazakhstan, which reduced output by a notable 70,000 b/d to 1.51mn b/d in May — helped by maintenance at a key field — but it remained 40,000 b/d above target.

Iraq's production rose by 20,000 b/d to 4.16mn b/d in May, despite its pledge to finally start shrinking output. This left it at 160,000 b/d above target, making its task of compensating for past production that much harder in the coming months. Gabon overshot its target by 80,000 b/d. All members that have overproduced were expected to submit new plans to Opec detailing how they plan to compensate for it in the first part of the year.

The biggest output rise in May came from Nigeria, which boosted production by 80,000 b/d to 1.48mn b/d, just 20,000 b/d shy of its target. Most Mideast Gulf states were more or less in line with their targets in May, although UAE's output rose by 20,000 b/d to 2.95mn b/d, 40,000 b/d above its pledge.