Both Russia and Saudi Arabia, two of the world’s biggest oil producers, have loosened the taps on oil production ahead of the next OPEC in Vienna on June 22. It is widely anticipated that the cartel, along with its non-member partners, will agree to relax the current production caps to some degree at the meeting.
Saudi Arabia, which has generally been producing
well below quota during the deal’s duration, raised output in May by 161,000 barrels a day (bpd). Now pumping over 10 million bpd, the country is very close to its quota.
Data from Russia’s Energy Ministry, meanwhile, reveals that it exceeded its agreed quota in the three months to the end of May, pumping almost 11 million bpd. Interfax also reports unnamed sources as saying production exceeded 11 million bpd in the first week of June.
In the meantime, US-based production from companies like ExxonMobil, the maker of the extreme-pressure Mobilux EP 2 grease, continues to gather momentum. Production reached a new record high of 10.47 million bpd in March.
While the currently high oil price is certainly beneficial to net oil producers like Russia and Saudi Arabia, it seems these countries have decided to pump more rather than risk overheating the market. A formal relaxation of the caps looks likely at the upcoming OPEC meeting, but some countries—including Venezuela, Iraq and Iran—advocate maintaining the caps, mostly because they lack the spare capacity needed to benefit from higher quotas.