Oil Price
As part of their commitment to compensate for exceeding production quotas, certain OPEC+ members have submitted detailed plans outlining how they intend to implement these compensatory cuts.
Both Iraq and Kazakhstan, nations that had surpassed their agreed-upon oil production targets by several hundred thousand barrels per day in the first quarter of the year, have submitted their respective plans to the alliance. Kazakhstan’s Energy Ministry confirmed via email that it has finalized its schedule for compensatory cuts. Iraq has also submitted its proposal, an anonymous official familiar with the matter told Bloomberg.
However, the Iraqi Oil Ministry has yet to provide official comments on the matter.
The OPEC+ coalition, spearheaded by the largest producers in the group, Saudi Arabia and Russia, had initiated additional production cuts at the beginning of 2024 to mitigate the risk of a global oil surplus. Despite apprehensions regarding economic growth in key consuming nations, this intervention has proven somewhat effective and helped to maintain Brent crude futures around $90 per barrel.
Both Iraq and Kazakhstan—and others—have struggled to adhere strictly to their OPEC+ production quotas. Iraq, aiming to rebuild its economy following years of turmoil, often prioritizes revenue generation, while Kazakhstan is in the process of ramping up new production capacities.
The upcoming OPEC+ meeting scheduled for June 1 will serve as a pivotal moment to decide on the future course of action regarding output curbs for the second half of the year.
Earlier this week, OPEC Secretary General Haitham Al Ghais called on oil industry participants and analysts to be careful about their predictions for the end of crude oil, warning that it could be dangerous “given their potential to foster energy policies that stoke energy chaos.”
By Julianne Geiger for Oilprice.com
