OPEC convened a workshop today to address oil overproduction issues and devise comprehensive compensation plans to make up for previous overages, according to an official OPEC press release.
The push for production cut compliance comes as the price of Brent crude is trading down roughly $6 per barrel over the last 30 days.
The workshop brought together technical experts from Iraq and Kazakhstan, along with industry professionals from secondary sources, and was prompted by the recent mandates outlined in the 35th OPEC and non-OPEC Ministerial Meeting held in June 2023, emphasizing the crucial adherence to production quotas and the principle of compensation. Per the directives of the 53rd Meeting of the Joint Ministerial Monitoring Committee (JMMC) held on April 3, 2024, countries with outstanding overproduced volumes were required to submit detailed compensation plans by April 30, 2024.
Iraq and Kazakhstan were key participants in today’s workshop. Iraq reported overproduced volumes totaling approximately 602,000 bpd, while Kazakhstan accounted for 389,000 bpd in January, February, and March 2024. Both nations presented plans that would ensure full compensation of overproduced volumes by the end of the year. Additionally, any excess production in April 2024 will be accommodated within the respective compensation frameworks throughout the remainder of the year.
This collaborative effort follows recent commitments made by Kazakhstan to compensate for January’s overproduction, aligning with the collective efforts of OPEC+ to maintain equilibrium in oil supply.
The workshop builds upon previous initiatives aimed at enhancing compliance with production cuts and fostering transparency within the industry.
As the global energy landscape continues to evolve, OPEC remains steadfast in its commitment to ensuring market stability and sustainable oil production practices.
In February, OPEC’s second-largest producer, Iraq, said it was committed to its voluntary production cut that capped its oil production at no more than 4 million bpd.
The bloc has been under increased pressure over this last month to showcase its ability to maintain the previously agreed-upon production cuts as oil prices have trailed off.