Saudi Arabia: Saudi crude output still downbeat in June; Brent prices stable
Brent crude oil prices averaged USD 82.92 per barrel in June, down 0.2% from May. On 28 June, the commodity traded at USD 86.43 per barrel, up 5.7% from 31 May. Prices dipped early in the month on OPEC+’s June decision to wind back output cuts from October, before rising due to increasing Israel-Hezbollah tensions.
Turning to production, Saudi oil output fell to 8.93 mbpd (million barrels per day) in June from 9.01 mbpd in May, remaining at one of the lowest levels in the past decade.
After shrinking by nearly a tenth in 2023, Saudi oil production is set to fall further in 2024—albeit at a gentler pace—as a result of various curbs agreed with OPEC+. In June, the cartel agreed to gradually unwind some of these production cuts from October; by the end of 2025, Saudi Arabia’s crude output should be near 10 million barrels per day, close to peak levels.
EIU analysts said:
“For Saudi Arabia, the [June OPEC+] deal implies flat third-quarter output of about 9m b/d, rising to 9.15m b/d in October-December and each quarter thereafter until end-2025, when production is due to reach 9.98m b/d. We expect further tweaks, however.”