OPEC+ has announced a new plan requiring seven member nations to implement additional oil output cuts in response to excess production. This strategy is intended to address the issue of overproduction and is set to run until June 2026. According to OPEC’s official announcement, the planned cuts will range from 189,000 to 435,000 barrels per day, which will exceed the upcoming production increases scheduled for next month.
The OPEC+ coalition, which includes OPEC members and additional allies like Russia, has been engaged in coordinated output reductions since 2022. Currently, these cuts amount to 5.85 million barrels per day, representing approximately 5.7% of the global oil supply. On March 3, the group signaled a recovery in market conditions, announcing an increase in production by 138,000 barrels per day starting in April for eight of its members, including prominent players like Saudi Arabia and Russia.
However, recent overproduction from Kazakhstan has reportedly caused tension among member countries, leading to the decision for further cuts. The newly revised plan dictates that Iraq will bear the largest share of the compensation cuts, closely followed by Kazakhstan and Russia. Notably, Saudi Arabia, a steadfast supporter of the OPEC+ agreement, will also implement smaller cuts ranging from 6,000 to 15,000 barrels per day over the next three months.
Kazakhstan has been operating at record production levels, partly due to Chevron’s expansion efforts at the Tengiz oilfield. Recent data indicates that the country produced 1.767 million barrels per day in February, significantly surpassing its OPEC+ assigned quota of 1.468 million barrels per day.