Oil & Gas

The OPEC Secretariat has received compensation plans from Russia, Iraq, and Kazakhstan aimed at addressing surplus oil production, in accordance with decisions made at the recent ministerial meeting which emphasized the critical importance of full compliance and a compensation mechanism.

According to a statement sourced from the Washington-based Specialized Energy Platform, Russia, Iraq, and Kazakhstan have submitted plans to gradually reduce their oil production by a combined total of 2.284 million barrels per day through September 2025. This follows an assessment by independent sources indicating excess production: approximately 480,000 barrels per day from Russia, 1.184 million barrels per day from Iraq, and 620,000 barrels per day from Kazakhstan.

Russia has outlined its strategy to compensate for overproduction in two phases. Initially, from October to November 2024, and subsequently from March through September 2025, as detailed in a Ministry of Energy statement reviewed by the Specialized Energy Platform. The Russian Ministry of Energy noted a decline in production levels since April, with commitments to fully resolve overproduction by July and meet all specified requirements.

Iraq, on the other hand, has committed to reducing production by 70,000 barrels per day from July to September 2024, followed by cuts increasing to 90,000 barrels per day by November 2024 through February 2025. Further reductions are planned in subsequent months, culminating in an 84,000 barrels per day cut by September 2025.

Kazakhstan's plan involves compensating for excess production starting with cuts of 18,000 barrels per day in July 2024, escalating to 265,000 barrels per day in October, and continuing with structured reductions through June 2025, ultimately achieving balance by September 2025.

At its June 2024 meeting, the OPEC+ alliance extended its collective production cuts of 2 million barrels per day until the end of 2025. This decision, underscored in a press release obtained by the Specialized Energy Platform, aims to stabilize the oil market sustainably and transparently, while reaffirming the Joint Ministerial Monitoring Committee's role in overseeing market conditions and compliance.

Saudi Arabia and seven other OPEC+ members have chosen to extend voluntary production cuts totaling 2.2 million barrels per day until the end of the third quarter of 2024. The gradual return of these cuts will commence from October 2024 through September 2025, with adjustments possible based on market developments. The alliance will retain voluntary cuts of 1.6 million barrels per day through the last quarter of 2025, ensuring continued market stability in accordance with their strategic approach.