OPEC has unexpectedly reduced its oil production, signaling potential internal tensions and raising questions about the group’s future strategy. According to a Bloomberg survey released Thursday, the cartel’s output fell by 200,000 barrels per day (bpd) in April, bringing total production to 27.24 million bpd.
This decrease contrasts sharply with previous expectations of a production increase. Roughly half of the decline came from Venezuela, where oil companies, including Chevron, are scaling back ahead of possible renewed U.S. sanctions.
More surprisingly, countries that had the green light to raise output—such as the United Arab Emirates (UAE) and Saudi Arabia—made only minimal changes. The UAE cut its production by 80,000 bpd, despite having a special allowance to produce more. Saudi Arabia added just 20,000 bpd, far less than its expanded quota.
At the same time, Iraq and the UAE continue to exceed their agreed production limits, casting doubt on the group’s ability to enforce discipline.
The development poses a serious credibility challenge for OPEC+. The alliance has committed to cutting 4.57 million bpd of overproduction by June 2026, mostly through reductions this year. Yet, it recently tripled its planned output hike for May to 411,000 bpd. Analysts believe this move may have been intended by Saudi Arabia to pressure members that have failed to comply with quotas.
Oil prices have not responded favorably. Brent crude briefly fell below $60 before recovering slightly to around $61 per barrel—well below Saudi Arabia’s estimated fiscal breakeven of $90.
Meanwhile, sources cited by Reuters claim Saudi officials have signaled they are willing to tolerate lower oil prices and reduced revenue. However, the recent production dip suggests otherwise.
With no clear strategy yet agreed upon, the spotlight now turns to the upcoming OPEC+ meeting on Monday. The group may announce a fresh supply increase—or simply debate it. Whether this is a strategic shift or the early signs of a renewed price war remains uncertain.
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