OPEC+ Hits 35-Year Production Low in April

OPEC member crude production fell to 26.56 million barrels per day in April, a fresh 35-year low for the 12-member cartel, as the broader OPEC+ alliance saw quota-bound output drop 1.9 million bpd month-over-month to 40.1 million bpd, the lowest level on record for the wider group, according to the May Monthly Oil Market Report released by the OPEC Secretariat in Vienna.

The figure, drawn from OPEC secondary-source aggregate data, marks the deepest cartel curtailment since the late 1980s price war and reflects continued infrastructure disruption from the US-Iran conflict that has restricted Strait of Hormuz tanker flows since March. OPEC+ production now sits 11.9 million bpd below pre-war run-rate levels, equivalent to roughly 12 percent of global oil supply against a 100 million bpd baseline, with Saudi exports out of Yanbu and Iranian, Iraqi and Kuwaiti loadings from the Gulf all running well below contract obligations.

OPEC Reference Basket falls $7.57 to $108.79 per barrel as Saudi compliance overshoots

The OPEC Reference Basket of 12 crude grades averaged $108.79 per barrel in April, down $7.57 from the March average as physical loadings caught up with paper-market expectations, the MOMR shows. Saudi Arabia produced slightly below its nominal quota for the third consecutive month, the Kingdom's continued signal of cohesion to the eight voluntary-cut OPEC+ countries, while Russia averaged 90 to 95 percent compliance with sanctions-related supply constraints continuing to weigh on its quota-fulfillment math.

The May 5 OPEC+ ministerial decision implemented a 206,000 bpd production adjustment effective in May, the first of the gradual unwinds of the 1.65 million bpd in additional voluntary cuts announced in April 2023. For June, the eight participating countries allocated the next 411,000 bpd of phased return, with Saudi Arabia and Russia each absorbing the largest share at 62,000 bpd. That lifts the Saudi production target to 10.291 million bpd and the Russian target to 9.762 million bpd, although actual flows will remain hostage to Hormuz transit and Russian export logistics.

IEA and EIA forecasts diverge on 2026 balance as inventories tighten

Forward-looking projections from rival agencies have diverged sharply since the conflict began. The IEA's May Oil Market Report estimates global oil inventories will fall by an average of 8.5 million bpd in the second quarter of 2026, keeping Brent prices around $106 per barrel through May and June. The US Energy Information Administration's May Short-Term Energy Outlook is more cautious, projecting Brent will average roughly $98 per barrel across Q2 as US shale and Saudi spare capacity respond to the price signal. OPEC's own MOMR retains a relatively robust 2026 oil demand growth outlook despite the disruption, while warning that infrastructure damage could extend the supply shortfall into the second half.

The shock to OPEC's production posture is feeding directly into prompt physical markets. Brent crude futures traded around $103 per barrel intraday on ICE on Thursday while WTI ranged between $98.52 and $99.96 per barrel on CME, with WTI down for a second consecutive session as traders priced in cautious optimism that Washington and Tehran could reach an agreement to lift naval blockades on both sides of the Hormuz chokepoint. Western Canadian Select for Hardisty settled at roughly $16.25 per barrel below WTI in mid-April, the differential having widened materially during the period of accelerated US Strategic Petroleum Reserve releases.

UAE departure reshapes OPEC voting bloc as June meeting nears

The May MOMR is the first to be issued since the United Arab Emirates formally departed OPEC on May 1, 2026, removing a producer that ranked third in the cartel by output capacity. The remaining 12 members and OPEC+ partners are scheduled to meet again in early June to set policy through the third quarter, with focus on whether the gradual cut-unwind schedule can survive a prolonged Hormuz disruption. Saudi seaborne crude exports already touched a record low of 4.97 million bpd in March, according to Joint Organisations Data Initiative figures, and any further deterioration would compromise the Kingdom's ability to backfill lost barrels from the rest of the alliance.

For consumer-side investors, the practical effect of the 35-year OPEC production low is to shift the marginal-supply burden onto US shale producers, who have already raised 2026 guidance in recent earnings (notably Permian Resources lifting its oil guidance to 192.5 mbod), and onto strategic reserve drawdowns from the US, China and India. Goldman Sachs, Morgan Stanley and RBC Capital Markets have each raised their Q3 Brent forecasts by between $5 and $15 per barrel since the start of the conflict, with the consensus base case now sitting in the $105 to $115 per barrel range.