And not just because of sanctions on Russia, but capacity constraints at several other producers were also a reason.
Estimates from secondary sources cited in the OPEC+ document suggest that there was a larger gap in total production by OPEC+ members last month compared with the group’s target. We see this in the fact that overall compliance with planned production constraints was 256% in May compared to 220% in April. This shows us that the problem of underproduction in OPEC+ has worsened as the targets were increased by 432,000 bpd last month.
This is not contributing much to global concerns about oil supply, which is reflected in the price of the commodity, which averaged its highest level in 10 years in May. This means a constant fluctuation of around $120 per barrel.
Russia has the largest deviation in production of all members
Russia, the largest non-OPEC producer in the OPEC+ pact, saw a slight increase in production in May compared to April, producing 9.273 million bpd in May compared to 9.159 million bpd in April. However, this is still well below Russia’s target under the agreement, which shows that Russia should have produced 1.276 million bpd more.
Going forward, we are unlikely to see a significant improvement in the situation. Earlier this month, the alliance decided that the July target would be 648,000 bpd higher than in June. We must also take into account that Libya, for example, remains exempt from production quotas due to the blockade of their oil facilities.
While Saudi Arabia, the UAE, and Iraq are likely to meet their quotas, Russia and the African OPEC members led by Nigeria and Angola are very unlikely to do so.
The US, led by Joe Biden, is urging the alliance to increase production so as not to disrupt the global economic recovery.