Total compliance within OPEC slipped below 100 percent, back to levels seen in February, dragged down by rising production in Angola, Iraq and Saudi Arabia. Meanwhile, a parallel effort by non-OPEC nations including Russia improved.

The two biggest producers, Saudi Arabia and Russia, without whom the venture would quickly fall apart, made 122 percent and 94 percent of their promised reductions in June, according to OPEC and International Energy Agency data, respectively. So far this year Saudi Arabia has consistently kept production well below its individual target while Russia has kept to its word that its own compliance would steadily improve. The next-biggest producer in the enterprise, Iraq, is proving less reliable. Its compliance rate sank to 28 percent last month, down from April’s high-water mark of 86 percent

Oil stockpiles “will fall steadily in the second half if OPEC maintains its current output cuts, although rising production from Libya and Nigeria is complicating the picture,” the IEA said in its July 13 monthly report.

Whether by design or misfortune, Venezuela leads OPEC in overachieving its promise. The troubled South American nation’s production cut, as of June, was 136 percent of the amount it agreed to, surpassing even Saudi Arabia in percentage terms. At the other end of the scale, non-OPEC Kazakhstan continues to pump considerably more than it should, as it brings on its new giant field, Kashagan, leading to a compliance rate of minus 145 percent.



The Gas as a bridge between a fossil-fuel past and a carbon-free future. Gas emits less pollution than oil and can be burned to produce the power that grids will need for electric cars.

But with the cost of renewable technologies falling sharply, some are warning that the outlook may not be so rosy.

In a long-term outlook published last month, Bloomberg New Energy Finance predicted that gas’s market share in global power generation will drop from 23 percent last year to 16 percent by 2040, and that gas-fired power generation capacity will start to decline after 2031.


It has huge implications for Total, BP and other oil majors already grappling with a possible surge in electric car use. Gas-exporting nations most notably Russia, Qatar and Australia will also be exposed. The global gas industry, based on multi-billion dollar pipelines and export plants, has decades long investment cycles and decisions being made today rely on rising demand until the middle of the century.

The energy transition is “fundamentally a force that cannot be stopped,”  Ben van Beurden said last month. “It is both policy and public sentiment, but also technology that is driving it.” Oil demand will probably peak in the 2030s or 2040s, he said, while “gas will not peak before the 40s if not in the 50s.”

Driving the shift has been a sharp decline in the cost of building new renewable power –- which, unlike generating electricity from coal or gas, is almost free to run after the initial capital investment has been made.

The consultant estimates that onshore wind and solar power are already competitive with coal and gas in Germany, and that within five years they will be cheaper to build than new coal and gas plants in China, the U.S. and India. By the late 2020s, it will start to even be cheaper to build new onshore wind and solar power than run existing coal and gas plants.

The trends that are undercutting optimism about the global gas outlook are already playing out in Europe. Natural gas demand remains well below a 2010 peak, as greater energy efficiency, rapid adoption of renewables and resilient coal consumption cut into its market share.

Still, most forecasts anticipate strong growth globally for natural gas demand for two decades or more. In the U.S., plentiful cheap supplies thanks to the shale boom helped gas displace coal as the primary fuel for power generation for the first time last year.

Much of the forecast growth in gas demand is dependent on China and India adopting policies that favor gas rather than coal in an attempt to improve air quality.

And the power sector, while the largest single source of natural gas demand, only accounts for 40 percent of the market. By contrast, nearly 60 percent of global oil use is as a transport fuel and vulnerable to the rise of electric vehicles.

The future of oil is down to whether electric vehicles take off or not; the future of gas is quite nuanced,” said James Henderson, director of natural gas at the Oxford Institute for Energy Studies.