OPEC+ produced 2.695 million barrels per day below its crude oil targets in May because of production problems at several members and as Russia faced sanctions, an OPEC+ document seen by Reuters showed.
Underproduction by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, was higher in May, when overall compliance with planned output cuts stood at 256%, up from 220% a month earlier.
The development adds to global supply concerns as Brent crude prices in May averaged their highest in a decade close to US$123 per barrel, and with June prices hovering just below at an average US$118/bbl.
Global demand is recovering from the pandemic and outpacing the abilities of OPEC+ countries to increase production.
Western sanctions on Russian oil following Moscow’s invasion of Ukraine in February have strained Russian crude production growth.
Russia’s crude output rose to 9.273 million barrels per day (bpd) in May from 9.159 million bpd in April, but its production levels remained 1.276 million bpd below target last month, the OPEC+ document showed, the largest deviation across all OPEC+ members.
Supply from the group faces additional challenges in June as a new blockade of Libyan crude oil facilities has greatly reduced the country’s production levels. Libya remains exempt from OPEC oil production quotas
US president Joe Biden’s administration has pushed OPEC+ to boost production so as not to impair the global economic recovery. But many OPEC+ producers lack the capacity to pump more crude following insufficient investment, a trend accelerated by the pandemic.
