Oil cartel OPEC has reduced its total oil output to its lowest level since 1991, when oil production in the Middle East was significantly disrupted.
Bloomberg reports its survey as revealing that many of those countries who were lagging behind in implementing the latest cuts have now caught it up, while leading producer Saudi Arabia has made good on last month’s promise to curb its production further.
OPEC reduced its production to 22.69 million barrels per day (bpd) in June, a drop of 1.93 million bpd. This is the lowest level since May 1991, shortly after the conclusion of the Gulf War, although some smaller oil producers have left the organisation since then. Declining production in Venezuela due to sanctions and economic recession has also contributed to the fall.
The intervention by OPEC+, which includes some partnering nations, has helped oil prices recover from the record lows seen earlier in the year. Many other oil producers—such as ExxonMobil in the US, which also produces Mobil lubricant products—have also scaled back production in response to lower oil prices and limited storage capacity.
At the height of the coronavirus crisis in April, global oil demand was down by about a third. It is therefore little surprise that OPEC has made such a huge sacrifice, with compliance being better than usual, even among the nonmember countries of the OPEC+ group. The few countries that have lagged in compliance agreed last month to compensate for this with additional future curbs.
