OPEC Supply Rises as Iran Rebound Complicates Balancing Task
(Bloomberg) -- OPEC’s crude production rose last month as rebounding supplies from Iran and Libya complicated the group’s efforts to keep global markets in balance.
The Organization of Petroleum Exporting Countries boosted output by 300,000 barrels a day to an average of 25.33 million a day in March, according to a Bloomberg survey. Iran and Libya accounted for most of the increase.
OPEC+ agreed to increase oil production gradually in the coming months, making a cautious bet on a summer economic rebound as the world recovers from Covid-19. Defying market expectations for the second time in less than a month, the group agreed to add more than 2 million barrels a day to global oil supplies from May to July.
That will return about a quarter of the crude they are still withholding after making deep cuts a year ago in response to the pandemic.
Iran and Libya have so far been exempted from the alliance’s agreement to reduce supplies because of disruptions they’ve suffered, but the two have recently managed to stage a recovery.
Tehran ramped up production by 140,000 barrels a day to 2.32 million a day, the highest since May 2019, according to the survey.
While Iran remains subject to U.S. sanctions, buyers in China have shown greater enthusiasm during the new administration of President Joe Biden, who seeks better relations with Tehran than his predecessor.
Shipments to the Asian nation have surged so substantially that vessels bearing Iranian crude are clogging up Chinese ports. The country’s exports surpassed 1 million barrels a day this month, said Sara Vakhshouri, president of SVB Energy International LLC.
Libya has also achieved considerable gains as a continued cease-fire in internal conflict allows the North African nation to resume exports. It boosted output by 100,000 barrels a day to 1.25 million a day, the survey showed.
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