Staff Reporter
OPEC+ is set to speed up its oil output increases and may fully reverse its 2.2 million barrels per day voluntary cuts by the end of October unless member compliance with production quotas improves, according to four sources within the group.
In a surprising move in April, OPEC+ announced a quicker-than-anticipated rollback of cuts despite sluggish prices and demand. This decision, led by Saudi Arabia, was reportedly aimed at holding certain members accountable for not meeting their quotas.
The coalition, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, agreed to another significant output increase for June, bringing the total planned releases for April, May, and June to nearly 1 million barrels per day.
Sources indicate that OPEC+ is likely to approve an additional 411,000 barrels per day increase for July during its June meetings, continuing this upward trend.
The group is expected to authorize further hikes for August, September, and October, with the goal of unwinding the remaining voluntary cuts if countries like Iraq and Kazakhstan fail to improve their compliance and deliver necessary compensation cuts.
If compliance does not improve, the voluntary cuts could be fully lifted by November, according to one source familiar with the situation.
Currently, OPEC+ is still reducing output by nearly 5 million barrels per day, with many cuts in place until the end of 2026.
In December, OPEC+ had agreed to gradually phase out the 2.2 million barrels per day voluntary cuts by September 2026 but decided to accelerate this timeline in April.
Oil prices fell to a four-year low below $60 per barrel in April due to these accelerated hikes and concerns over a global slowdown exacerbated by U.S. tariffs.
UBS analyst Giovanni Staunovo noted that the market is likely to react negatively to this news unless crude exports indicate better compliance within OPEC+.
This week, reports emerged that Saudi officials have communicated to allies and industry leaders their reluctance to support oil markets with additional supply cuts.
Kazakhstan recently stated that it would prioritize national interests over OPEC+ directives, with its oil output in April exceeding its quota despite a 3% decline.
