OPEC Output Surged by 2.34 Million Bpd in June as Hormuz Flows Restored, Survey Shows

LONDON, July 4 — OPEC’s crude oil production surged by 2.34 million barrels per day (bpd) to 18.75 million bpd in June, as Persian Gulf members restored exports through the Strait of Hormuz following a peace accord between the US and Iran, according to a Bloomberg survey.

The gains were driven primarily by Kuwait, Saudi Arabia and Iran. Kuwait posted the largest increase among OPEC’s 11 members, boosting output by 870,000 bpd to 1.36 million bpd. The country’s production had been slashed by 80% during the conflict and still remains significantly below typical rates. Saudi Arabia recorded the second-biggest gain, raising output by 550,000 bpd to an average of 7.2 million bpd. Tanker-tracking data show Saudi shipments have now reached 90% of pre-conflict levels. Iran followed with a 510,000 bpd increase, pumping 2.85 million bpd, though it has accumulated a hoard of supply on tankers at sea as it struggles to find buyers.

Even before the peace deal, Persian Gulf producers had found ways to smuggle cargoes through the strait, which was largely shuttered in the early stages of the conflict. The US-Iran agreement now allows for more overt transit, accelerating the recovery of regional oil flows.

Despite the sharp rebound, June production remains considerably below prewar levels. When adjusted for the United Arab Emirates’ exit from OPEC in May, the group’s output was still 7.3 million bpd, or 28%, below February levels. The UAE quit the organization in May, giving it the freedom to pump at will once the strait fully stabilizes. Iraq has also briefly threatened to exit unless it is eventually granted a higher output quota.

The supply uptick comes at a time when fuel demand in key consumer China remains subdued, creating a surplus in parts of the market and erasing crude’s wartime rally. Brent futures traded near $72 a barrel on Friday, down sharply from wartime peaks.

Major members of the wider OPEC+ alliance, which includes Russia, are due to hold a monthly video conference on Sunday to discuss output limits for the month ahead. Two delegates said this week they expect another small hike in quotas of 188,000 bpd in August, the penultimate monthly stage in a process of restoring output halted several years ago.

In the wider alliance, Russia has bolstered crude exports to record levels following Ukrainian strikes on its refineries, potentially diverting volumes that cannot be processed at home. Bloomberg’s production survey is based on ship-tracking data, information from officials and estimates from consultants Rapidan Energy Group, FGE NexantECA, Kpler Ltd. and Rystad Energy AS.