OPEC Production: From 37-Year Low to Partial Recovery

May 2026 — 37-year low. OPEC's 11-member crude output fell to 16.33 million barrels per day (bpd) in May, a decline of 1.22 million bpd from April and the lowest level since at least 2000 (described by multiple sources as a 37-year low) . The collapse was driven primarily by the U.S. naval blockade of Iran and the effective closure of the Strait of Hormuz, which crippled exports from Iran and other Gulf producers . Iran's output alone dropped approximately 710,000 bpd to 2.34 million bpd, a five-year low .

June 2026 — surge to 19.43 million bpd. Following the MOU and the reopening of the strait, OPEC raised production by approximately 3.3 million bpd in June, reaching roughly 19.43 million bpd, according to a Reuters survey reported on July 3 . The figure of 18.75 million bpd sometimes cited is close but slightly below this reported Reuters survey result — exact monthly averages may vary depending on the source and survey methodology. OPEC+ also agreed on June 7 to a fourth consecutive monthly output quota hike (188,000 bpd starting in July) to signal readiness to ramp up supplies .

Still far below pre-war baseline. Despite the June surge, OPEC output remained well below its pre-war baseline of roughly 29 million bpd (for OPEC 11 members) . The EIA assessed that production shut-ins in the Middle East peaked at nearly 10.8 million bpd in May, representing a massive loss of supply that will take many months, if not years, to fully restore .

Oil Price Collapse: The War Premium Erased

Oil prices crashed through June as the war risk premium was rapidly priced out of the market. Key milestones included:

• By June 12, before the MOU was even finalized, WTI had already fallen to roughly $84-85/bbl as markets anticipated a deal .
• On June 15, after Trump announced the preliminary agreement, oil prices tumbled further, with Brent settling at a three-month low .
• By June 24, Brent had fallen below $75/bbl (first time since before the war) and WTI dropped below $70/bbl .
• By June 25, Brent crude traded around $72.42 and WTI around $69.27, fully erasing all wartime geopolitical risk premiums and returning to pre-conflict levels .
• On June 30, Reuters reported that oil was headed for its biggest monthly and quarterly losses since the COVID-19 pandemic in early 2020 .

In total, Brent crude fell roughly 21% in June, and WTI fell over 20%, wiping out the entire war risk premium and bringing prices back below $71/bbl — in line with pre-war levels . CNBC confirmed that the Brent contract dropped roughly 21% in June, its largest monthly decline since March 2020, while WTI dropped more than 20%, its worst monthly performance since late 2021 .

Analyst Projections and Inventory Outlook

• Multi-month production recovery. Analysts noted that while the MOU reopened the strait, a full recovery of OPEC production to pre-war levels (~29 million bpd) would take many months due to shut-in wells, damaged infrastructure, and the need for a permanent peace deal .
• Global inventories likely years to rebuild. The IEA had forecast a potential supply glut with the strait reopened, but OPEC's chief dismissed that as premature given the scale of the supply destruction . The EIA's June assessment noted that production shut-ins averaged 10.5 million bpd in April and peaked near 10.8 million bpd in May, suggesting that the drawdown of global commercial inventories was severe and that rebuilding stocks to pre-war levels would be a multi-year process .
• Iran's rapid export rebound. Iran exported more than 40 million barrels of crude in the two weeks after the blockade was lifted, selling at roughly 20% above pre-war prices, indicating strong immediate demand for its returning supply .

Key Caveats

• The figure of 18.75 million bpd for June OPEC output sometimes cited is slightly below the 19.43 million bpd reported in the most recent Reuters survey (July 3) . The 18.75 figure may reflect a mid-month estimate or a different survey methodology (e.g., including only certain core members).
• The 16.33 million bpd May figure and the "37-year low" description are confirmed by a Rigzone report citing a Bloomberg survey .
• The precise 21% figure for Brent's June decline is a reasonable calculation based on the movement from war-peak prices (~$92) to ~$72, and is explicitly confirmed by CNBC reporting .
• The assessment that global inventories will take "years" to rebuild is an analytical inference from the scale of the 10.8 million bpd shut-in peak, which the EIA described as unprecedented outside of a global pandemic .

OPEC Production: From 37-Year Low to Partial Recovery

May 2026 — 37-year low. OPEC's 11-member crude output fell to 16.33 million barrels per day (bpd) in May, a decline of 1.22 million bpd from April and the lowest level since at least 2000 (described by multiple sources as a 37-year low) . The collapse was driven primarily by the U.S. naval blockade of Iran and the effective closure of the Strait of Hormuz, which crippled exports from Iran and other Gulf producers . Iran's output alone dropped approximately 710,000 bpd to 2.34 million bpd, a five-year low .

June 2026 — surge to 19.43 million bpd. Following the MOU and the reopening of the strait, OPEC raised production by approximately 3.3 million bpd in June, reaching roughly 19.43 million bpd, according to a Reuters survey reported on July 3 . The figure of 18.75 million bpd sometimes cited is close but slightly below this reported Reuters survey result — exact monthly averages may vary depending on the source and survey methodology. OPEC+ also agreed on June 7 to a fourth consecutive monthly output quota hike (188,000 bpd starting in July) to signal readiness to ramp up supplies .

Still far below pre-war baseline. Despite the June surge, OPEC output remained well below its pre-war baseline of roughly 29 million bpd (for OPEC 11 members) . The EIA assessed that production shut-ins in the Middle East peaked at nearly 10.8 million bpd in May, representing a massive loss of supply that will take many months, if not years, to fully restore .

Oil Price Collapse: The War Premium Erased

Oil prices crashed through June as the war risk premium was rapidly priced out of the market. Key milestones included:

• By June 12, before the MOU was even finalized, WTI had already fallen to roughly $84-85/bbl as markets anticipated a deal .
• On June 15, after Trump announced the preliminary agreement, oil prices tumbled further, with Brent settling at a three-month low .
• By June 24, Brent had fallen below $75/bbl (first time since before the war) and WTI dropped below $70/bbl .
• By June 25, Brent crude traded around $72.42 and WTI around $69.27, fully erasing all wartime geopolitical risk premiums and returning to pre-conflict levels .
• On June 30, Reuters reported that oil was headed for its biggest monthly and quarterly losses since the COVID-19 pandemic in early 2020 .

In total, Brent crude fell roughly 21% in June, and WTI fell over 20%, wiping out the entire war risk premium and bringing prices back below $71/bbl — in line with pre-war levels . CNBC confirmed that the Brent contract dropped roughly 21% in June, its largest monthly decline since March 2020, while WTI dropped more than 20%, its worst monthly performance since late 2021 .

Analyst Projections and Inventory Outlook

• Multi-month production recovery. Analysts noted that while the MOU reopened the strait, a full recovery of OPEC production to pre-war levels (~29 million bpd) would take many months due to shut-in wells, damaged infrastructure, and the need for a permanent peace deal .
• Global inventories likely years to rebuild. The IEA had forecast a potential supply glut with the strait reopened, but OPEC's chief dismissed that as premature given the scale of the supply destruction . The EIA's June assessment noted that production shut-ins averaged 10.5 million bpd in April and peaked near 10.8 million bpd in May, suggesting that the drawdown of global commercial inventories was severe and that rebuilding stocks to pre-war levels would be a multi-year process .
• Iran's rapid export rebound. Iran exported more than 40 million barrels of crude in the two weeks after the blockade was lifted, selling at roughly 20% above pre-war prices, indicating strong immediate demand for its returning supply .

Key Caveats

• The figure of 18.75 million bpd for June OPEC output sometimes cited is slightly below the 19.43 million bpd reported in the most recent Reuters survey (July 3) . The 18.75 figure may reflect a mid-month estimate or a different survey methodology (e.g., including only certain core members).
• The 16.33 million bpd May figure and the "37-year low" description are confirmed by a Rigzone report citing a Bloomberg survey .
• The precise 21% figure for Brent's June decline is a reasonable calculation based on the movement from war-peak prices (~$92) to ~$72, and is explicitly confirmed by CNBC reporting .
• The assessment that global inventories will take "years" to rebuild is an analytical inference from the scale of the 10.8 million bpd shut-in peak, which the EIA described as unprecedented outside of a global pandemic .