The Organization of Petroleum Exporting Countries (OPEC) received data from Saudi Arabia about an increase in crude oil production last month by more than 1 million barrels per day. This growth reflects the resumption of production by the Persian Gulf countries during a short ceasefire in the war with Iran.
Saudi Arabia informed OPEC that in July it produced 8.2 million barrels of crude oil per day compared to 7.1 million barrels in the previous month. This is stated in the OPEC report, which was reviewed by Bloomberg agency on Wednesday. At the same time, the July production level is still several million barrels per day lower than the figures before the start of the conflict.
Resumption of production and accumulation of reserves
The current production volume exceeds by approximately 780,000 barrels per day the volume of oil that Saudi Arabia, according to its own data, supplied to the market. This corresponds to estimates that the country is accumulating oil reserves while export routes remain complicated. The International Energy Agency (IEA) noted in its report that at the beginning of August, Saudi Arabia’s domestic crude oil reserves reached the highest level at least since 2016.
The collapse of the ceasefire and the resumption of hostilities between the USA and Iran have threatened two main export routes of Saudi Arabia — the Strait of Hormuz in the Persian Gulf and the Bab el-Mandeb Strait in the Red Sea. At the same time, producers in the Middle East continue to discreetly transport significant volumes of oil from the region.
Among the seven OPEC members that directly provided the organization’s secretariat with production data, the total production volume increased by 1.88 million barrels per day. Most of this increase fell on Iraq and Saudi Arabia.
Source: Bloomberg
