OPEC oil production hits new low.

A Reuters survey showed that OPEC oil production continued to fall in April to its lowest level in more than two decades, as the US-Israel conflict with Iran led to the closure of the Strait of Hormuz and forced countries to cut exports.

The Reuters survey is based on flow data from financial firm LSEG, information from other transport tracking companies such as Kpler, and data from sources at oil and gas companies, OPEC, and consulting firms.

Survey results show that crude oil production by the 12-member Organization of the Petroleum Exporting Countries (OPEC) decreased by 830,000 barrels per day in April compared to the previous month, to 20.04 million barrels per day. The March figure was further revised down by 700,000 barrels per day due to changes in estimates for Saudi Arabia.

Eight members of the OPEC + group, including OPEC and its allies such as Russia , had previously agreed to resume increasing oil production from April, although the outbreak of war with Iran on February 28 and the de facto blockade of the Strait of Hormuz made the agreement impossible to implement.

The Reuters survey also showed that Kuwait recorded the largest drop in output in the group in April, reflecting a full month of disrupted exports.

Saudi Arabia and Iraq also continued to reduce production, while the United Arab Emirates (UAE) was the only Gulf member to increase output. Similar to Saudi Arabia , the UAE has export routes that bypass the Strait of Hormuz, and tanker data suggests that UAE exports increased in April.

According to Reuters surveys, April output was OPEC's lowest level since at least 2000, not accounting for changes in membership since then, and significantly lower than levels during the COVID-19 pandemic in 2020 when demand collapsed.

The survey also showed that , in addition to the UAE – which left OPEC on May 1st – Venezuela and Libya also increased production in April.

The US is lending 53.3 million barrels of oil from its Strategic Petroleum Reserve.

In other news, the Trump administration announced on Monday that it will lend energy companies 53.3 million barrels of crude oil from the country's Strategic Petroleum Reserve (SPR) as part of a global agreement to stabilize the oil market, which has surged due to the US-Israel conflict with Iran.

Nine companies, including Exxon Mobil, Trafigura, and Marathon Petroleum Company, borrowed only about 58% of the total 92.5 million barrels that the U.S. Department of Energy (DOE) offered to lend from the SPR last month.

This spring, the DOE lent approximately 80 million barrels from the SPR as the agency sought to release a total of 172 million barrels into the market.

The U.S. agreed to this larger release in a March deal with more than 30 countries belonging to the International Energy Agency (IEA) to release approximately 400 million barrels of oil from its reserves. The agreement aims to cool oil and fuel prices, which have been driven up by Iran's blockade of the Strait of Hormuz – a bottleneck through which about 20% of the world's oil normally passes each day.

IEA head Fatih Birol said the conflict has caused the biggest energy crisis ever. If supply disruptions continue, the IEA is prepared to release more oil from its strategic reserves. To date, IEA member countries have released about 20% of their available reserves .

According to data from the AAA Automotive Association, the average price of gasoline in the U.S. on Monday reached $4.52 per gallon, the highest level since 2022.

The DOE is lending oil from the SPR to companies, and those companies will repay with crude oil at an additional fee of up to 24%. The department says this mechanism will help stabilize the market without costing American taxpayers.

The SPR, stored at four coastal locations in Texas and Louisiana, currently holds approximately 384 million barrels of oil – less than the world's oil consumption in four days.

Quang Trung

Source: https://baoninhbinh.org.vn/san-luong-dau-opec-cham-day-moi-260512153932676.html