The most surprising part of the International Energy Agency’s latest monthly outlook isn’t its demand forecast, which remains pessimistic, but rather what it says about how much oil an OPEC+ stalwart pumped last month.

Traditional production quota cheats Kazakhstan, Iraq and the United Arab Emirates were joined by Saudi Arabia in flouting their targets, the agency says.

That’s all the more surprising because the kingdom has an exemplary record of pumping no more than it has pledged.

Saudi Arabia’s crude output jumped by 700,000 barrels a day last month to reach 9.8 million barrels a day, the IEA says. That would make it the highest in two years, according to Bloomberg’s production survey and figures from a group of secondary sources OPEC uses.

The jump in production comes as the IEA sees Saudi Arabia’s exports soaring by 500,000 barrels a day last month — even more than the 440,000 barrels a day seen in tanker tracking data compiled by Bloomberg.

Producers were quick to assure the market that the surge in shipments wasn’t a return to the pumping free-for-all we witnessed just before the Covid-19 pandemic crushed demand.

Instead, they said, it reflected movements of barrels out of the Persian Gulf during a time of heightened tension.

If that was the case, it would be reasonable to expect stockpiles in Saudi Arabia and neighbors being drawn down. But the opposite happened, the IEA says.

In addition, the agency says refinery runs in the kingdom also increased by 300,000 barrels a day from May.

It’s no big jump to conclude that if exports, stockpiles and domestic processing all rose, production must have increased, as well.

Official Saudi production figures, coming Tuesday in OPEC’s monthly report, stand to show a very different picture, likely in near-perfect compliance with the kingdom’s target of 9.367 million barrels a day.

Alongside that, the group will publish an average of production estimates from its eight secondary sources.

Those companies are being asked to come up with a lower figure for Saudi Arabia, according to people familiar with the matter. Riyadh argues that the standard practice of reporting oil production isn’t appropriate for last month, and they should remove changes to stockpiles.

That new figure would be much closer to the kingdom’s OPEC+ target but still be at odds with the definition of that target, which is for production.

–Julian Lee, Bloomberg News