OPEC Output Rose in July Led by Gulf Nations, Survey Shows

d3h8}vea3nb5qr0x2eej4epg_media_dl_1.png Data compiled by Bloomberg

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(Bloomberg) — OPEC’s crude oil production recouped some more of its wartime losses last month with gains in Kuwait, Saudi Arabia and Iraq, though opaque shipping data complicated the process of tracking the group’s output, a Bloomberg survey showed.

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Supplies from the Organization of the Petroleum Exporting Countries increased by 1.16 million barrels a day in July to an average of 19.44 million barrels a day, with the three Persian Gulf nations accounting for almost all of the gains. With shipping traffic through the Persian Gulf still disrupted by the Iran war — and flows through the Red Sea at risk — the group’s output remains considerably below pre-war levels. 

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The partial recovery in OPEC supplies following the short-lived ceasefire reached in mid-June between the US and Iran has helped cool oil prices and mitigated the risks to the global economy. Crude futures sank below $80 a barrel in London on Tuesday as Treasury Secretary Scott Bessent said the two sides may be close to an agreement. 

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While visible tanker traffic through the Strait of Hormuz chokepoint has been reduced to a trickle, exporters have had some success in discreetly shuttling barrels out. The process involves using tankers with transponders switched off to avoid detection, then transferring cargoes to other vessels in safer areas for transport to international markets. 

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The output gains in July could also be partly explained by higher domestic consumption. Oil producers in the Middle East typically bolster output during the summer months, when surging electricity demand for air conditioning often requires them to directly burn crude oil. 

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Iraq led OPEC’s increases in July, boosting production by 460,000 barrels a day to 2.3 million a day, according to the survey. The country’s exports jumped 37% in July on increased loadings from the southern port of Basrah, according to tanker-tracking data compiled by Bloomberg.

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Kuwait, which had seen its output crushed to a fraction of normal levels by the conflict, increased 360,000 barrels a day to a monthly average of 1.57 million a day. Kuwaiti officials said this week the country had restored output to the highest average level since the start of the conflict. 

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The picture for OPEC leader Saudi Arabia was more mixed. 

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According to the survey, the kingdom’s production rose by 390,000 barrels a day to 7.4 million barrels a day, an increase that still leaves output several million barrels short of pre-conflict volumes. Its exports also came under pressure as Iran’s allies in Yemen, the Houthi rebel group, threatened tankers on the Red Sea route used by the Saudis as an alternative to the Persian Gulf.

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Last weekend, major members of an alliance composed of OPEC and its allies agreed another modest increase in quotas, completing the reversal of cutbacks announced in 2023. Still, with so much Middle East output still shuttered, the increase remains largely theoretical until the war ends.

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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.

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—With assistance from Prejula Prem, Lucia Kassai and John Deane.

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