Energy ministers of the OPEC+ producers will discuss in a Thursday call the importance of sticking to the oil production quotas under the deal, delegates from the alliance told Bloomberg on Wednesday.
In every press release for years, the OPEC+ group has been stressing how important sticking to the quotas is. Overproduction has partly negated the bullish effects of the cuts on the oil market.
The alliance is beginning the easing of the cuts this month, adding 138,000 barrels per day (bpd) to combined production.
However, all OPEC+ calculations on production levels depend on producers not exceeding their quotas—which has not been the case, ever.
Some producers, such as OPEC’s second-largest producer, Iraq, and non-OPEC Russia and Kazakhstan, have been failing for years to pump at or below the levels assigned to them under the OPEC+ agreements.
At the meeting in early March, when OPEC+ decided to begin easing the cuts in April, the countries “reiterated their collective commitment to full conformity with the additional voluntary production adjustments,” OPEC said.
In the middle of March, the countries submitted their compensation plans, which showed that Russia plans to fully compensate all overproduction by September 2025, while Iraq, Kazakhstan, and the United Arab Emirates (UAE) will compensate each month until June 2026.
Kazakhstan’s oil production has been the most recent source of contention as the country boosted output to record highs with the start-up of oilfield expansion projects.
A Russian order this week to restrict Kazakhstan’s oil export capacity could lead to foreign operators in Kazakhstan reducing output in the coming weeks if two of the three moorings of the main oil export terminal on the Black Sea handling Kazakhstan’s oil exports remain shut for more than a few days.
Later this week, the Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ group is set to meet online to review market developments. The alliance will have to decide whether to push forward with further easing of the cuts in May or pause the increase in supply. Reports suggest OPEC+ would raise May production levels, too.
