Russia Set to Surpass Saudi Arabia as Top OPEC+ Oil Producer

In a surprising turn of events, Russia is poised to overtake Saudi Arabia as the leading crude oil producer within the OPEC+ group, according to the International Energy Agency (IEA). The agency revealed this information in its monthly oil market report last week, highlighting Saudi Arabia’s decision to extend its production cut as a contributing factor.

The IEA estimates that Saudi Arabia’s total crude output will drop to 9 million barrels per day (bpd) during the months of July and August. This reduction is a result of the kingdom’s decision to prolong its production cut in an effort to stabilize oil prices. Should these estimates hold true, Saudi Arabia’s output will reach its lowest point in two years, effectively making Russia the top oil producer in the OPEC+ group of crude exporters.

Riyadh had announced earlier this month that it would extend its voluntary crude output cut of 1 million bpd for another month, encompassing August. Simultaneously, Russia declared a 500,000 bpd reduction in its exports for the upcoming month. Together, these cuts will account for 1.5% of the global supply.

According to data from the IEA, Saudi Arabia produced 9.98 million bpd in June, while Russia pumped 9.45 million bpd during the same period. This slight difference in output positions Russia to surpass Saudi Arabia and claim the top spot among OPEC+ producers.

Saudi Energy Minister Prince Abdulaziz bin Salman previously emphasized the deep cooperation between Riyadh and Moscow within the OPEC+ group. He pledged to take “whatever necessary” measures to support the oil market during these challenging times.

The recent round of crude cuts adds to the voluntary reductions of 1.66 million bpd that certain OPEC+ members initially implemented in April. These cuts were later extended until the end of 2024. OPEC+ is a collective of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia. Together, they account for approximately 40% of the world’s crude oil production. Since November 2022, the group has been actively cutting oil output.

Meanwhile, in a sign that Russia is following through with its plan for a voluntary cut after months of robust exports, Russian oil shipments plunged in June to their lowest volume since 2021.

As the global oil market undergoes these significant shifts in production, the IEA has also adjusted its oil demand outlook, reflecting a more moderate projection. These developments will undoubtedly have a substantial impact on the dynamics of the global energy landscape, as well as on the economies of the countries involved.