Iran pushes OPEC production up during June

Organization of Petroleum Exporting Countries (OPEC) members produced an average total of 28.257 million b/d in June, an increase of 37,000 b/d from May output. While the rise is not large, it has been viewed with concern. Middle East Economic Survey, which produced the figures, said the totals mask a hike in Iranian output compensated to a degree by a sharp fall in Iraqi production.

July 20, 1998

2 min read

Organization of Petroleum Exporting Countries (OPEC) members produced an average total of 28.257 million b/d in June, an increase of 37,000 b/d from May output.

While the rise is not large, it has been viewed with concern. Middle East Economic Survey, which produced the figures, said the totals mask a hike in Iranian output compensated to a degree by a sharp fall in Iraqi production.

However, most other OPEC members were seen to be near targets for OPEC production cuts promised in March, inspiring Luis Giusti, chairman of Petroleos de Venezuela SA, to blame the continued decrease in prices on Iran.

Now crude oil markets are waiting to see whether additional production cuts agreed to in June, which are expected to take total output of OPEC-excluding Iraq-to less than 24.4 million b/d, are made as promised (OGJ, June 29, 1998, p. 28).

Brent crude for dated delivery was trading at almost $14/bbl before the June OPEC meeting, and fell away to less than $12/bbl in the interim period.

But Saudi Arabian warnings to customers that promised cuts would restrict August deliveries helped boost dated Brent to $12.17/bbl and Brent for August delivery to $13.02/bbl at close of trading on July 14-the latter representing an increase of 31¢ on the day.