LONDON, March 20 (Reuters) – OPEC+ has unveiled a new schedule that will require seven of its member nations to make additional cuts to their oil output in order to compensate for production exceeding agreed limits. These cuts will more than offset the monthly production increases planned for next month.
The new plan calls for monthly cuts ranging from 189,000 barrels per day (bpd) to 435,000 bpd, according to data published on OPEC’s website. These adjustments will continue until June 2026. OPEC+—which includes OPEC members as well as Russia and other allies—has been implementing a series of production cuts since 2022, currently reducing output by 5.85 million bpd, or about 5.7% of global supply, in efforts to stabilize the oil market.
On March 3, OPEC+ confirmed that eight of its members, including Russia, Saudi Arabia, the UAE, Kuwait, Oman, Algeria, Kazakhstan, and Iraq, would increase production by 138,000 bpd each month starting in April. This increase was justified by what the group called healthier market fundamentals.
However, sources told Reuters that recent overproduction by Kazakhstan, which exceeded its OPEC+ quota, frustrated other members and contributed to the decision to proceed with the cuts. As part of the revised plan, Iraq will bear the largest share of the compensation cuts, followed by Kazakhstan and Russia. Saudi Arabia, a key supporter of the OPEC+ agreement, will make small compensation cuts, ranging from 6,000 to 15,000 bpd, over a three-month period.
Kazakhstan’s production has been particularly high, partly due to U.S. oil giant Chevron expanding output at the country’s largest oilfield, Tengiz. OPEC data for February showed that Kazakhstan’s crude production reached 1.767 million bpd, up from 1.570 million bpd in January, surpassing its OPEC+ quota of 1.468 million bpd.
Related Topics:
- Oil Prices Drop 2% to 12-Week Low as OPEC+ Plans to Boost Output
- OPEC+ Reconsiders Oil Production Increase Following Trump Complications
- How Will OPEC React to Iran’s Request for Action Against U.S. Sanctions?