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OPEC Delivers Three Quarters of Record Oil Cut in May

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen outside their headquarters in Vienna, Austria December 7, 2018. REUTERS/Leonhard Foeger/File Photo
The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen outside their headquarters in Vienna, Austria December 7, 2018. REUTERS/Leonhard Foeger/File Photo
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OPEC Delivers Three Quarters of Record Oil Cut in May

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen outside their headquarters in Vienna, Austria December 7, 2018. REUTERS/Leonhard Foeger/File Photo
The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen outside their headquarters in Vienna, Austria December 7, 2018. REUTERS/Leonhard Foeger/File Photo

OPEC oil output hit the lowest in two decades in May as Saudi Arabia and other members started to deliver a record supply cut, a Reuters survey found, although Nigeria and Iraq are laggards in making their share of the reduction.

On average, the 13-member Organization of the Petroleum Exporting Countries pumped 24.77 million barrels per day (bpd) this month, the survey found, down 5.91 million bpd from April’s revised figure.

OPEC and its allies last month agreed to an output cut to offset a slump in demand and prices caused by the coronavirus crisis. An easing of government lockdowns and lower supply have helped oil prices LCOc1 more than double compared with a 21-year low below $16 a barrel in April.

“OPEC has made a strong start in May with its latest production cut, lowering supply by 5 million bpd versus April,” Daniel Gerber, chief executive of Petro-Logistics, which assesses OPEC supply by tracking tanker shipments, told Reuters.

“However, compliance is far from perfect. With less than four weeks between the adoption and the start of the agreement, many countries had already committed volumes to buyers and have not managed to reduce supply to the agreed levels.”

OPEC and its allies, known as OPEC+, agreed to cut supply by a record 9.7 million bpd from May 1. OPEC’s share, to be made by 10 members from their October 2018 output in most cases, is 6.084 million bpd.

So far in May, they delivered 4.48 million bpd of the pledged reduction, equal to 74% compliance, the survey found.

May’s output would be the lowest by OPEC since 2002, excluding membership changes since then, Reuters survey records show.

The biggest drop in supply came from Saudi Arabia, which pumped a record 11.7 million bpd in April. Saudi supply is expected to drop even further in June.

The United Arab Emirates and Kuwait also cut back sharply, sources in the survey said. Both had also pumped at record rates in April.

Iraq, a laggard in making cuts in 2019, curbed output according to the survey following reduced exports from the south of the country, although at 38% its compliance was much lower than that of the Gulf OPEC members.

Another laggard, Nigeria, made only 19% of its promised reduction, the survey found.

Venezuela and Iran reduced output in May, while Libyan supply was steady. All three were exempt from voluntary cuts because of US sanctions or internal issues limiting production.

Iran is seeing a drop in fuel use because of the coronavirus outbreak, compounding the impact of sanctions on supply. Venezuela, contending with both US sanctions and a long-term decline in output, posted another drop in exports.

Oil output in Libya has plunged since Jan. 18 due to a blockade of ports and fields by groups loyal to Libyan National Army leader Khalifa Haftar. Production averaged 100,000 bpd in May, the survey found.

The Reuters survey aims to track supply to the market and is based on shipping data provided by external sources, Refinitiv Eikon flows data, information from tanker-trackers such as Petro-Logistics and Kpler, and information provided by sources at oil companies, OPEC and consultants.

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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.