OPEC’s Production Increases As Iran Ramps Up Output

OPEC’s crude oil production is estimated to have increased to a three-month high of 24.96 million barrels per day (bpd) in April, thanks to a major jump in Iran’s output, the latest survey by Argus showed.

Other surveys of analysts and ship-tracking data also suggest that OPEC either boosted or maintained its crude oil production flat last month, ahead of the planned increase of 600,000 bpd from the OPEC+ coalition in May.

OPEC will announce official data on the cartel’s production in its Monthly Oil Market Report (MOMR) on Tuesday, May 11.

According to the Argus survey, OPEC boosted its crude oil production by 70,000 bpd in April, primarily due to an 80,000-bpd increase in Iran’s oil production which rose to a nearly two-year high. Iran, exempted from the OPEC+ cuts, is estimated to have pumped 2.35 million bpd in April, overtaking Kuwait as OPEC’s fourth-largest producer and posting its highest production since May 2019.  

Before the U.S. sanctions from 2018, Iran was OPEC’s third-biggest producer behind Saudi Arabia and Iraq.

The monthly Reuters survey also found that OPEC likely raised its oil production in April, driven by another supply increase from Iran. Iran raised its oil production by as much as 200,000 bpd in April compared to March to reach an output of 2.5 million bpd, the Reuters survey showed.

Iran ramped up its output by 60,000 bpd to 2.41 million bpd in April, as per the Bloomberg survey of ship-tracking data, estimates from consultancies, and information from officials. According to the Bloomberg survey, a large drop in Libyan supply because of a wage dispute at an oil terminal offset the Iranian increase in production.

Iran is estimated to have not only raised its production, but also its oil exports in recent months despite the U.S. sanctions on Iranian crude exports. Independent refiners in the world’s top oil importer, China, are said to be buying most of Iran’s oil that circumvents the American sanctions.

The Islamic Republic is raising its production as the talks about bringing the United States and Iran back into the so-called Iran nuclear deal have intensified and made some progress in recent weeks.