OPEC+ is set to accelerate its oil production increases and could return up to 2.2 million barrels per day (bpd) to the market by November if erring members fail to comply with output quotas, Reuters reports.
This latest development marks a significant acceleration in the group’s output strategy, analysts say.
OPEC+ had earlier stunned the oil market in April with a faster-than-expected rollback of production cuts, despite subdued oil prices and weakened global demand.
Industry insiders say the move, largely driven by OPEC+ heavyweight Saudi Arabia, was aimed at punishing members that have consistently failed to adhere to agreed quotas.
So far, OPEC+ has committed to releasing nearly 1 million bpd into the market for the months of April, May, and June. On Saturday, the group agreed to another major production increase for June, adding to the supply pressure on already fragile oil prices.
According to Reuters sources, OPEC+ is likely to announce another 411,000 bpd increase for July during its upcoming June meeting.
This trend is expected to continue through August, September, and October, as the group ramps up pressure on members such as Iraq and Kazakhstan, countries accused of persistently breaching output limits.
Market Reaction
Oil prices have already shown signs of weakness. In April, crude fell to below $60 per barrel—a four-year low—as traders reacted to the combination of faster OPEC+ output hikes and escalating geopolitical uncertainties, including new tariffs announced by U.S. President Joe Biden that have raised fears of a global economic slowdown.
Commenting on the potential impact of the news, UBS oil analyst Giovanni Staunovo said, “The market will take this news negatively, as long as crude exports do not suggest an improved compliance within OPEC+.”
A Defiant Kazakhstan
Tensions within the alliance are increasingly visible. This month, Kazakhstan openly defied the group, with its energy minister declaring that national interests would take precedence over OPEC+ decisions. Despite a 3% dip in overall output, Kazakhstan still produced above its OPEC+ quota for April, further fueling concerns about the group’s internal unity and enforcement capability.
Why It Matters
OPEC+ is still collectively cutting nearly 5 million bpd from the global oil supply, with many of those reductions scheduled to remain until 2026.
- The 2.2 million bpd in voluntary cuts—introduced in stages since 2022—were initially intended to stabilize prices in a sluggish demand environment.
- In December 2023, the group agreed to gradually phase out these voluntary cuts by September 2026.
- However, the April decision to accelerate this timeline has now placed further pressure on non-compliant nations.
If the current trend of poor compliance continues, the voluntary cuts may be entirely unwound by November, effectively removing the cushion that has helped support global oil prices over the past year.
