Opec began the unwinding of voluntary production cuts last month but the impact on actual production was limited. Output edged up by just 10,000 b/d to 26.98mn b/d, largely because previous unfettered overproduction by a handful of producers limited the scope for actual gains. The broader Opec+ alliance began unwinding 2.2mn b/d of voluntary cuts being made by eight core members in April, with combined quotas increasing by 138,000 b/d. Five of these eight producers are part of Opec.
Opec’s share of this quota increase was 105,000 b/d, but output rose by barely 10% of this total. This was in large part because Iraq, a consistent overproducer, cut supply by 50,000 b/d to 4.10mn b/d in April. Although this left it above quota, it offset the increases from elsewhere. Opec+ officials had been confident when speaking with MEES that the actual impact of the tapering on production would be much less than the paper increase to quotas given that some producers were already overproducing and so at minimum wouldn’t be increasing output; under a best case scenario they will cut production further to compensate for previous overproduction (MEES, 7 March). (CONTINUED - 1041 WORDS)
