OPEC’S CRISIS: Iraq needs money, so it produces an extra 80,000 barrels of oil a day. But non-compliance (cheating) by cartel members isn’t OPEC’s biggest strategic problem.
Brent crude tumbled below $50 a barrel this month as data showed U.S. shale producers were alive and kicking, confounding OPEC’s efforts to control the supply glut. While oil recovered losses after Saudi Arabia and Russia threw their weight behind extending the six-month output reductions, it’s still 7 percent off post-deal highs.
Under the November deal, OPEC envisioned curbing 1.2 million barrels per day of output, with Iraq trimming 210,000 barrels a day to 4.351 million barrels a day. In the first quarter, Iraq met only 61 percent of its targeted cut, though compliance improved to 90 percent in April, according to OPEC data. It’s not the only straggler. The United Arab Emirates achieved just 57 percent of its cut in the first quarter, though the U.A.E. exceeded its target in April, and many non-OPEC producers including Russia also missed their goals.