OPEC's oil production rebounded sharply in June as Gulf producers finally began bringing shut-in barrels back online after months of war-induced disruptions. However, despite the impressive headline number, the cartel is still pumping nowhere near where it was before the Strait of Hormuz crisis turned Middle East oil flows upside down:
According to Reuters' monthly survey, the 11 OPEC members produced 19.43 million barrels per day in June, up 3.3 million bpd from May, when output plunged to the lowest level recorded by the survey since at least 2000. The biggest gains came from Kuwait and Iran. Tehran was able to restore production after the United States lifted its naval blockade of Iranian ports under last month's 60-day agreement:
Saudi Arabia and Iraq also boosted output, while Nigeria and Libya posted smaller increases despite avoiding the worst of the Gulf disruptions:
The rebound, however, shouldn't be mistaken for a return to normal. Production remains well below OPEC's collective quotas, and much of the recent recovery reflects producers simply restarting volumes they were forced to shut in rather than adding new supply:
Tanker traffic through Hormuz remains well below pre-war levels, and insurers and shipowners are still approaching the waterway with caution after repeated attacks on commercial vessels:
