Global investment bank Morgan Stanley says the oil production increase pledged by OPEC+ for May has failed to materialize, despite a formal agreement to boost output by 411,000 barrels per day. The shortfall raises questions about the coalition’s capacity—or willingness—to ramp up supply as promised.
In a note released on Saturday, analysts led by Martijn Rats observed that the promised production gains did not appear in available data sets. These included refinery flows, export volumes, pipeline shipments, and inventory changes. The findings suggest that even with a planned quota increase of 1 million barrels per day between March and June, real production growth has remained minimal.
“Notably, it does not appear that production in Saudi Arabia has ramped up significantly,” the analysts wrote, according to a report by Bloomberg.
OPEC+ May Still Add More Supply in Coming Months
Despite the weak delivery so far, Morgan Stanley projects that OPEC+ could still add 420,000 barrels per day between June and September. This increase would tip the oil market into surplus territory. Robust output growth from non-OPEC+ countries would further drive the expected oversupply. Morgan Stanley estimates this growth at 1.1 million barrels per day, outpacing the global demand growth forecast at just 800,000 barrels per day.
Earlier this year, OPEC+ surprised many by announcing a more aggressive return of supply to the market. This move defied earlier expectations of a more gradual easing. However, doubts quickly emerged about whether all member nations had the infrastructure, reserves, or political appetite to meet those targets.
Saudi Arabia, the group’s de facto leader, was expected to lead the production surge. Yet current data indicates that its actual output has remained mostly flat. This development has renewed concerns that headline quotas may overstate the group’s short-term production capabilities.
Prices Stay Firm Despite Supply Lag
The sluggish output response has not weighed down oil prices significantly. Brent crude rose to $66.40 per barrel, while West Texas Intermediate (WTI) traded around $64.52 at the time of writing. Analysts attribute this firmness to ongoing optimism around global trade. They cite the prospect of improved relations between the U.S. and China, which could spur demand.
Still, with supply now expected to outpace consumption in the coming months, some market watchers caution that the recent price strength may prove temporary unless geopolitical or economic disruptions tighten supply.
