OPEC Oil Output Rose Further in July, Reuters Survey Shows

A Reuters survey indicated that crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) increased further in July, as Gulf nations resumed supplies that had been interrupted due to the US-Israeli war on Iran and the effective closure of the Strait of Hormuz.

The survey revealed that output from the 11-member OPEC bloc rose by 1.17 million barrels per day (bpd) month-on-month, reaching 19.85 million bpd. This continued the production recovery from May, which had marked the lowest monthly figure since at least 2000, according to Reuters surveys. This level was also significantly lower than those seen during the COVID-19 pandemic in 2020 when demand collapsed. These figures exclude the UAE, which withdrew from the organization on May 1.

Iraq recorded the largest increase, followed by Kuwait. Iran also boosted exports, but shipments slowed again after the United States reinstated its blockade of the Islamic Republic's ports in mid-July. Saudi supplies showed a slight decrease. Libya also increased its production, with its shipments unaffected by the war on Iran.

Seven members of the OPEC+ alliance, which includes OPEC, Russia, and other allies, had agreed to increase production in July, but the conflict in the Middle East made this impossible.

The Reuters survey is based on flow data from the London Stock Exchange Group, information from other flow-tracking companies such as Kpler, and data from consultants and sources within oil companies and OPEC.

Separately, the I.I.R. oil sector monitoring service noted yesterday, Monday, in a memo seen by Reuters, that Saudi Aramco had postponed the restart of its Jazan oil refinery, with a capacity of 400,000 bpd, to August 30, following two Houthi attacks since late July.

The prolonged shutdown of the refinery could escalate pressure on global fuel markets, which have already been affected by refinery outages in the Middle East after the outbreak of the Iran war and Ukrainian attacks on Russian refineries, potentially boosting refining margins.

The Yemeni Houthi group claimed responsibility for attacking the refinery, which an earlier I.I.R. notice, also seen by Reuters, indicated had been offline since July 27 following a previous Houthi attack. The refinery was previously scheduled to resume operations on August 15. Aramco has not yet responded to a request for comment.

Last month, the Houthis announced a naval blockade on Saudi Arabia in the Red Sea, stating it was in response to what they described as a Saudi blockade of Yemen, an accusation denied by Riyadh.

Saudi Arabia's Ministry of Energy stated yesterday, Sunday, that industrial security firefighting teams from Aramco extinguished a fire that occurred earlier that day at one of the company's refinery facilities in Jazan. The ministry did not provide additional information about the refinery's operations.

According to I.I.R., the July 27 attack damaged the integrated combined-cycle gasification complex and the refinery's tank farm area. It added that the refinery's catalytic reformer unit, with a capacity of 80,000 bpd, has been unexpectedly offline since May 27 due to operational issues.

Catalytic reformers convert naphtha into high-octane components used in gasoline blending and also produce hydrogen necessary for other refining units.

Kpler data showed that Saudi Arabia's average fuel exports, including LPG, reached approximately 1.32 million bpd in July, up from 1.16 million bpd in June, but still about 30 percent lower than levels recorded before the outbreak of the Iran war in late February.