OPEC+ did not lift production by 400,000 barrels per day in May and June to kill the oil price and to go full throttle on an oil price war.
That’s what Bjarne Schieldrop, Chief Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), said in an oil report sent to Rigzone by the SEB team on Friday, adding that the group did it to meet added demand for oil in the Middle East, “which rise[s] significantly in summertime due to air conditioning and religious pilgrimage to Saudi Arabia”.
“The plan of lifting production by 2.1 million barrels per day by December 2026 has not at all been abandoned,” Hvalbye stated in the report.
“It is still a monthly decision of what to do. Lift production or even reduce production if needed,” he added.
“The global oil market is still tight as of today [Friday] with consumers asking for more than what producers are giving them. Thus, the front-end backwardation,” he continued.
“While there is no sign of a blasting price war emerging between OPEC+ and U.S. shale oil producers, it is still clear that U.S. shale oil producers will have to shed the needed volume to make room for more oil from OPEC+ to December 2026 to the magnitude of 2.1 million barrels per day added supply from the group,” Hvalbye went on to state.
In a BMI report sent to Rigzone by the Fitch Group on Friday, BMI analysts said, “with OPEC+ continuing to increase production at faster pace than earlier guidance the risk of oversupply remains”.
The analysts noted in that report that they continue to hold to their current forecast for Brent crude to average $68 per barrel in 2025.
In a BofA Global Research report sent to Rigzone on Friday, BofA analysts stated that successive months of accelerated OPEC+ oil production will continue to push demand/supply out of balance. The analysts outlined in the report that, in their view, this “will push Brent to average <$60 per barrel across 2-3Q25”.
Rigzone has contacted OPEC for comment on the SEB, BMI, and BofA Global Research reports. Rigzone has also contacted the American Petroleum Institute (API) and the U.S. Department of Energy (DOE) for comment on the SEB report. At the time of writing, none of the above have responded to Rigzone.
A release posted on OPEC’s website on May 3 announced that Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman “will implement a production adjustment of 411,000 barrels per day in June 2025 from [the] May 2025 required production level”.
“The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023 … met virtually on 3 May 2025, to review global market conditions and outlook,” that release noted.
“In view of the current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025, the eight participating countries will implement a production adjustment of 411,000 barrels per day in June 2025 from May 2025 required production level,” it added.
The release highlighted that “this is equivalent to three monthly increments” and pointed out that “the gradual increases may be paused or reversed subject to evolving market conditions”.
A release posted on OPEC’s website on April 3 announced that Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman “will implement a production adjustment of 411,000 barrels per day, equivalent to three monthly increments, in May 2025,”.
The statement posted on OPEC’s site on May 3 revealed that the eight countries will meet on June 1 to decide on July production levels.
To contact the author, email andreas.exarheas@rigzone.com
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