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Opec Gulf producers make the largest cuts in May

A worker at Nahr Bin Umar oil field, north of Basra. Iraq has about 8% of global oil reserves Reuters/Essam Al-Sudani
The largest reductions came from Opec’s Gulf producers Saudi Arabia, Kuwait and UAE

Opec oil output fell in May after Saudi Arabia and other members of the broader Opec+ alliance made voluntary output cuts to support the market, a Reuters survey found on Wednesday, although increases elsewhere in the group limited the decline.

The Organization of the Petroleum Exporting Countries has pumped 28.01 million barrels per day (bpd) this month, the survey found, down 460,000 bpd from April. Output is down more than 1.5 million bpd from September.  

Several members of Opec+, which includes Opec and allies such as Russia, in April pledged voluntary cuts on top of those made in late 2022 as the economic outlook worsened. Oil prices initially rose only to fall back as economic worries persisted.

For May, six Opec members agreed to cut output by a further 1.04 million bpd, adding to about 1.27 million bpd of reductions already in place since late last year.

Month on month, production among the Opec nations that are required to limit output fell by 540,000 bpd, the survey found.

According to the survey, compliance with all cuts fell to 137 percent from 194 percent in April. Output is still undershooting the targeted amount partly because Nigeria and Angola lack the capacity to pump as much as their agreed level.

Opec+ meets on Sunday in Vienna to decide its output policy.

The largest reductions came from Opec’s Gulf producers Saudi Arabia, Kuwait and the United Arab Emirates, which largely implemented their voluntary cuts, the survey found.

Iraqi output edged up because of higher exports from the south of the country. But with exports from the north still shut down, Iraqi production was well below its allowed level.

Among countries with higher production, output from Nigeria and Angola posted gains. Exxon in late April resumed operations at its Nigerian sites after resolving a labor dispute.

Libya, Iran and Venezuela are the three producers exempt from Opec cuts. All three managed to boost output in May, with Iranian exports in particular rising according to the survey.

The survey aims to track supply to the market. It is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from companies that track flows such as Petro-Logistics and Kpler, and information provided by sources at oil companies, Opec and consultants.