Opec crude oil production dips to 31.72mb/d in June

The crude production was 31.75 million b/d in May.

This marks the reversal of the 40,000-b/d increment in the previous month, a Platts survey of Organization of the Petroleum Exporting Countries (Opec) and oil industry officials and analysts has revealed.

Pressure on Iranian volumes intensified ahead of the July 1 implementation of European Union (EU) sanctions that not only ban the import of Iranian oil but also prohibit the provision of insurance for shipments of Iranian oil, even to non-EU destinations.

Because of pooling arrangements for reinsurance between protection and indemnity clubs around the world, the sanctions are having a big impact on non-EU shipping.

Also having an impact are US financial sanctions which came into effect on June 28.

The survey estimated that Iranian output dropped by 150,000 b/d to 3.1 million b/d in June from 3.25 million b/d in May.

"The number that no survey can fully know is how much of Iran's output is going into storage because sanctions, notably the EU sanctions on shipping, have really hit Iran's exports," said John Kingston, Platts director of news.

"The drop in Iran's sales is far greater than the drop in its output. So for now at least, the market is well-supplied, with all other OPEC countries aside from Iran producing a net increase from last month, and with the Iranians socking away a lot of oil that will ultimately find its way on the market. From that perspective, it's more bearish news," Kingston said.

Smaller output dips totalling 30,000 b/d came from Angola and Iraq, while Saudi Arabia boosted output by 100,000 b/d in June to 10.1 million b/d, the survey found.

Smaller increments totalling 50,000 b/d came from Libya and the UAE. The June total leaves OPEC's 12 members overproducing their 30 million b/d output ceiling by 1.72 million b/d.

The oil-producing organization's ministers agreed at a June 14 meeting in Vienna to maintain the ceiling, in effect since the beginning of the year.