The continued growth of Iran’s oil production and maintaining its position in OPEC

According to Energy Press, reports from secondary sources show that crude oil production reached 3 million and 226 thousand barrels per day in May, which was an increase of 7 thousand barrels compared to April 2024. OPEC’s June report, which was published on Tuesday (June 22), indicates that the members of this organization produced a total of 26,629,000 barrels of oil in May, which is compared to 26,600,000 barrels produced in May. In April, it is 29,000 barrels more. According to OPEC’s June report, after Saudi Arabia with a daily production of 9 million barrels and Iraq with a daily production of 4.195 million barrels, Iran has been the third largest producer of this organization with a daily production of 3.226 million barrels. According to this report, the oil production of five OPEC members (Iran, UAE, Nigeria, Gabon, Equatorial Guinea) increased during the period under review, so that the largest increase in production was related to Nigeria with 74,000 barrels per day. Iran, Venezuela and Libya are exempted from the supply reduction agreement of OPEC and non-OPEC producer alliance (OPEC Plus).
Oil price changes

According to the latest OPEC report, the price of Iran’s heavy crude oil in May decreased by 4 dollars and 66 cents, equivalent to 5.2%, compared to April 2024. The price of Iranian heavy crude oil reached 84 dollars and 13 cents in May 2024, while this figure was 88 dollars and 79 cents per barrel in April 2024. The average price of Iranian heavy crude oil in 2024 was 83 dollars and 41 cents. The price of the OPEC oil basket reached $83.59 cents per barrel in May 2024, which has decreased by $5.53 cents (equivalent to 6.2%) compared to April 2024. According to the report of the OPEC Secretariat, the global demand for crude oil for 2024 will increase by 2.25 million barrels daily, and the total world oil demand for 2024 is predicted to be 104.46 million barrels.

OPEC has also predicted that global oil demand will increase by 1.85 million barrels per day in 2025 and reach a total of 106.310 million barrels per day. OPEC does not foresee a peak in oil demand in its long-term outlook, expecting demand to reach 116 million bpd by 2045, and possibly even higher. This assessment is in stark contrast to a recent report by the International Energy Agency (IEA), which predicts that oil demand will peak by 2029 and then decline to around 106 million barrels per day by the end of the decade.

Dangerous interpretation
The Secretary General of OPEC described the report of the International Energy Agency as a “dangerous interpretation” and believes that this report can lead to unprecedented fluctuations in the energy market. Al-Ghais emphasized in an article in the Energy Aspects magazine that such narratives can mislead consumers and destabilize the energy market. Since late 2022, the OPEC+ alliance, OPEC members led by Saudi Arabia and allies such as Russia, have imposed significant production cuts to stabilize the market.