According to OPEC, the eight OPEC+ countries that had previously announced additional voluntary production adjustments in April and November 2023-Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia, and the UAE-held a virtual meeting on May 3 to assess global market conditions and the future outlook.
“Given the current healthy market fundamentals, as reflected in the low oil inventories, and following the decision agreed upon on Dec. 5, 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments beginning from April 1, the eight participating countries will implement a production adjustment of 411,000 barrels per day in June from May required production level, The Caspian Post reports citing Kazakh media.
The gradual increases may be paused or reversed and are subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability. The eight OPEC+ countries also noted that this measure will enable the participating countries to accelerate their compensation,” reads the OPEC statement.
According to the schedule presented on the OPEC website, Kazakhstan can increase oil production to 1,500 million barrels per day in June.
The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation. The eight countries will meet on June 1 to decide on July production levels.
The same day, Stankevicius Group, a global market research and government relations division that reviews global institutions and governments’ recent activities in international market, shared insights into how Kazakhstan is unfairly criticized in the public sphere for allegedly failing to fulfill its obligations under the OPEC+ agreement and why there are no merits to support the claim, reported Reuters.
“First, Kazakhstan’s share in the total production volume of the OPEC+ member countries is nearly 5% and less than 2% in all global production, and therefore, even minor excesses on its part cannot affect the overall picture of prices on world markets.
Second, like all other countries, Kazakhstan has the right to defend its national interests, as do other participants in the deal. Production cuts usually affect less influential countries, while the largest exporters find loopholes to circumvent quotas. For example, the UAE, Russia, and Iraq have repeatedly violated their quotas.
However, no public claims have been made against them, although all of them have a significantly higher share in production. Kazakhstan uses possible levers to fulfill its obligations, but is increasingly raising the issue of the need to revise the current quotas within the alliance.
Third, by sharply increasing oil production, Saudi Arabia is causing even greater damage to the OPEC+ deal, stimulating a decline in prices.
In other words, Kazakhstan is maintaining a balance of its interests and the interests of other participants in the deal. While other participants, on their part, allow themselves to disrupt the market balance,” reads the statement.
