(Bloomberg) — OPEC+ is more than half a billion barrels behind on its pledge to supply world markets with oil, exacerbating concerns about the group’s ability to balance the global market.
In May 2020, the Organization of Petroleum Exporting Countries and allies joined forces to coordinate production cuts aimed at re-balancing the global oil market. Since then, the group known as OPEC+ has pumped a collective 562 million barrels less than levels stipulated in the agreement, according to data from its Joint Technical Committee, which analyzes crude markets on behalf of ministers.
OPEC+’s compliance rate with the deal to reduce output soared to 256% in May as members produced 2.7 million barrels a day below their collective target.
The group has been struggling for months to deliver the volumes of oil to the market that it has pledged, as some members contend with diminished investment and operational issues.
Spare capacity is confined to the core members in the Persian Gulf, and even their untapped supplies may be eclipsed by the losses caused by sanctions on Russia in retaliation for its invasion of Ukraine. But now there are doubts about just how much more supply OPEC+ could bring to the market.
On Monday, French President Emmanuel Macron told his US counterpart at the G-7 summit that UAE ruler Sheikh Mohammed bin Zayed said OPEC+’s two leading oil exporters are already pumping almost as much as they can. In response, UAE oil minister Suhail Al Mazrouei said the nation’s crude output is about 3.17 million barrels a day, close to its production ceiling in the OPEC+ agreement.