Saudi Arabia Asks OPEC to Lower June Oil Output Figure

Photo: WAM

Saudi Arabia, one of the world's largest oil producers, has recently made an unusual request to companies that help the Organization of the Petroleum Exporting Countries (OPEC) measure how much oil each member produces. The kingdom is asking these firms to report a lower oil production figure for June 2025 by using a different method called "supply-to-market" rather than the traditional measurement of oil that is pumped out of the ground.

What Is Saudi Arabia Requesting Exactly?

Usually, OPEC relies on independent companies—often called “secondary sources”—to ”provide monthly data on how much oil each member country produces. These firms include market analysts, energy consultants, and media agencies. They play a vital role in ensuring transparency and accountability among OPEC members by reporting on whether each country is following its assigned production quota.

However, Saudi Arabia now wants these companies to stop using the usual method of measuring production and instead use a method that focuses on how much oil was actually delivered to the market, also known as the "supply-to-market" approach.

Why Does This Matter?

If the companies accept this request, the reported output for Saudi Arabia in June will be about 400,000 barrels per day lower than what it would have been using the traditional method. This helps Saudi Arabia stay within its official OPEC quota and avoid any criticism for overproducing.

By using a lower figure, Saudi Arabia can appear to be in full compliance with OPEC agreements while still responding to global market needs and geopolitical events that may have required higher production for a short time.

Saudi Arabia's Statement on the Matter

The Saudi Ministry of Energy posted a message on its official account on platform X (formerly Twitter), saying that it had fully complied with its June OPEC production limit. They stated that they used the marketed-supply method, which showed output at 9.352 million barrels per day.

The ministry admitted that at one point in June, they briefly pumped more oil than what was delivered to the market. They explained that this was due to heightened regional tensions, which required more flexibility in managing oil flows.

What Did the IEA Say?

However, the International Energy Agency (IEA), which OPEC no longer recognizes as a secondary source since 2022, reported a different story. The IEA said Saudi Arabia’s actual production rose by 700,000 barrels per day in June, bringing the total to 9.8 million barrels per day.

This is a significant jump and would mean that Saudi Arabia exceeded its official OPEC quota. The IEA also noted that Saudi Arabia led other Gulf countries in shipping more oil out of the region during the conflict between Israel and Iran.

How Oil Production Affects Global Markets

Saudi Arabia is the largest crude oil exporter in the world. Changes in its oil production numbers can have huge effects on global oil prices. Investors, traders, and governments closely watch OPEC's monthly reports to understand whether supply and demand are balanced.

If Saudi Arabia is producing more than expected, it could lead to an oversupply, which might cause prices to fall. On the other hand, if production is too low, prices could rise, affecting everything from transportation costs to inflation around the world.

How OPEC Usually Measures Oil Production

OPEC’s usual method is to measure how much oil is extracted from the ground. But this time, Saudi Arabia wants the analysts to count only the oil that was actually delivered to customers, which they argue is a more accurate reflection of real market activity during June.

The "supply-to-market" figure does not include oil stored in tanks inside the country or overseas. This could explain why the number is significantly lower than the actual production.

Signs of Rising Oil Exports

Tanker-tracking data—which monitors the movement of oil ships—had already shown a sharp increase in Saudi crude oil exports during June. This suggested that the country may have increased shipments in response to the regional conflict between Israel and Iran.

According to Saudi Arabia, some of the extra oil was sent to domestic storage facilities or overseas locations in Egypt, Japan, the Netherlands, and South Korea. The goal, they said, was to “optimize the flow of crude” between the Eastern and Western markets.

More specifically, oil shipments through Egypt’s Sumed pipeline—which delivers oil to Europe and North America—rose by 5 million barrels in June, or about 170,000 barrels per day, according to Bloomberg's tracking data.

Why Is This Important Now?

OPEC is in the middle of a plan to reverse earlier oil production cuts made during the pandemic and early post-COVID years. In total, the group agreed to add 2.2 million barrels per day back into the market. The final step of this increase is expected in September 2025, when OPEC plans to raise output by another 548,000 barrels per day.

However, the IEA warns that the world might soon have too much oil. According to its July report, countries outside of OPEC—like the U.S., Canada, and Guyana—are also increasing production. They are expected to add 1.4 million barrels per day this year, which is twice the rate of global oil demand growth.

If supply continues to grow faster than demand, global oil prices could fall. As of now, Brent crude oil is trading near $69 per barrel.

Tensions Inside OPEC

Saudi Arabia has been increasingly frustrated with some OPEC members, especially countries like Kazakhstan, who have not been following their production limits. This has led Saudi Arabia to carry more of the burden in keeping oil markets balanced.

Because of these issues, Riyadh has taken the lead in managing oil supply more carefully. But asking for a change in how production is measured could set a controversial new precedent and might raise questions about transparency and fairness inside OPEC.

What’s Next for OPEC and Saudi Arabia?

Saudi Arabia’s request to report a lower oil output for June by using a different method is both unusual and significant. While the country says this reflects actual market activity, critics argue that changing the reporting method could undermine the trust placed in OPEC’s data and decisions.

As global oil markets remain sensitive due to geopolitical tensions and rising production, OPEC must decide whether to stick to its traditional rules or allow some flexibility—especially for a powerful member like Saudi Arabia.

The outcome will be important not only for oil prices but also for the credibility and unity of OPEC itself in the months to come.