OPEC's crude oil production collapsed to 16.13 million barrels per day in May, the lowest level since 2000, according to a Reuters survey cited by Oil Price. That figure, which excludes the UAE, is even lower than output during the height of the Covid lockdowns, when demand crashed.
The supply crunch comes as OPEC's June Monthly Oil Market Report forecasts demand growth will continue to outpace non-OPEC+ supply additions through 2027. Production from countries in the Declaration of Cooperation averaged 33.13 million bpd in May, down 190,000 bpd from April based on secondary-source estimates.
Oil could spike to $150 per barrel if the U.S.-Iran ceasefire collapses, warned Rystad Energy. Renewed hostilities would deepen supply shut-ins in the Middle East, particularly through the Strait of Hormuz, further pressuring upstream production.
OPEC's own data shows a tightening market despite months of war-related disruption and elevated prices. The group left its global demand outlook largely unchanged, signaling confidence that consumption will hold up even as physical supply shrinks.
Critics argue the demand growth forecast may be overly optimistic, as slowing global economic activity and aggressive central bank tightening could erode consumption faster than OPEC projects. Softening Chinese industrial output and ongoing lockdowns also threaten the bullish demand narrative.