Eight OPEC+ countries have decided to accelerate their oil output increase, raising production by 411,000 barrels per day (bpd), equivalent to three monthly increments, in May.
This decision led to a drop in oil prices, with Brent crude falling more than 6% to below $70 per barrel, reported Reuters.
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, had initially planned to increase output by 135,000bpd in May.
However, after an online meeting, they opted for a larger increment, citing “continuing healthy market fundamentals and the positive market outlook”.
“This comprises the increment originally planned for May in addition to two monthly increments,” OPEC stated.
The organisation also noted that these gradual increases might be paused or reversed depending on market conditions.
The decision aims to address concerns about potential disruptions to Iranian supply amid US pressure.
The May output hike is part of a broader plan by Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates to unwind a recent output cut of 2.2 million barrels per day (mbbl/d).
This cut was implemented to stabilise the market. OPEC+ continues to maintain 3.65mbbl/d of other output cuts until the end of 2026.
Kazakhstan’s record output has caused tensions within the group, particularly with Saudi Arabia.
OPEC+ is urging Kazakhstan and other members to adhere to agreed targets. Recently, Kazakhstan’s production has exceeded its OPEC+ targets, leading to calls for further cuts.
Production in Kazakhstan may decline this month due to Russia’s order to shut some export capacity on the CPC pipeline.
This pipeline is crucial for oil exports from Kazakhstan, involving companies like Chevron and ExxonMobil.
The eight OPEC+ countries are scheduled to meet on 5 May 2025 to discuss output levels for June, as per OPEC’s statement.
