Uche Cecil Izuora
The Organization of Petroleum Exporting Countries (OPEC) says that Saudi Arabia reported an increase of crude oil production by just over 1 million barrels a day (MMbpd) in July, a reflection of the recovery among Persian Gulf producers during a brief ceasefire in the Iran war.
The kingdom told the group it pumped 8.2 MMbpd of crude in July, up from 7.1 MMbpd in the previous month, according to a report from the Organization seen by Bloomberg on Wednesday.
That’s still several million below pre-conflict levels.
It’s also about 780,000 bpd higher than the volume it reported having supplied to the market, consistent with assessments that the kingdom is adding to inventories while export routes remain impeded. The International Energy Agency (IEA) estimated in a report that Saudi domestic crude stockpiles reached the highest since at least 2016 by early August.
The collapse of the ceasefire and renewed hostilities between the U.S. and Iran has imperiled two of Saudi Arabia’s main export channels the Strait of Hormuz in the Persian Gulf and the Bab el-Mandeb Strait in the Red Sea though Middle East producers are still quietly shuttling considerable volumes out of the region.
Among the seven OPEC members that directly reported production figures to the group’s secretariat, output increased by 1.88 MMbpd, with the majority of the increase coming from Iraq and Saudi Arabia.