The Organisation of the Petroleum Exporting Countries (Opec) has received updated plans for Iraq, Kazakhstan and other countries to make further oil output cuts to compensate for pumping above agreed quotas, the group said.
Opec+, which includes Opec, plus Russia and other allies, has implemented a series of output cuts since late 2022. Its compensation plan is designed to ensure that members who do not make the cuts in full implement further reductions.
The latest plan requires seven nations to cut output by a further 369,000 barrels per day in monthly steps between now and June 2026, compared with an earlier plan running from March until next June, according to Reuters calculations.
Under the latest plan, monthly cuts will range from 196,000 bpd to 520,000 bpd from this month until June 2026, up from between 189,000 bpd and 435,000 bpd previously.
Should the latest cuts be made in full, the compensation plan would to a large extent offset a planned 411,000 bpd output increase being made by other members of Opec+ in May, providing additional support for the oil market.
The seven members making the cuts are Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan and Oman, according to the table, which also includes Algeria with no required cut. In May, six of them will cut by a total of 378,000 bpd, the table shows.
However, Opec+ has repeatedly revised the plan after countries did not make the cuts as pledged.
Iraq, the group's largest overproducer, plans to step up efforts to deliver on its compensation cuts and a source said its crude allocations to customers for May cargoes are much lower, a source with knowledge of the plan said.
"We need more reduction to meet the compensation plan," the source said.
According to the table, Iraq needs to compensate for a total of 1.93 million bpd of overproduction by June 2026. Kazakhstan needs to make the second-largest cut of 1.3 million bpd in the same time frame. -Reuters