Apr 16, 2025
OPEC+ producers with excess output are implementing new compensation schemes.
Seven of the eight Opec+ members that began gradually reducing a 2.2 million barrels per day output cut this month have submitted updated plans to address their excess production above quotas since early 2024.
According to the Opec secretariat, Iraq, Kazakhstan, Russia, the UAE, Kuwait, Oman, and Saudi Arabia intend to produce about 305,000 barrels per day under their combined targets on average from April to June 2026. This adjustment is to account for a total overproduction of 4.573 million barrels per day from January 2024 to March 2025. This amount reflects the cumulative overproduction during that period rather than a monthly average, equating to an average monthly excess of 305,000 barrels per day.
Algeria is the only member that did not exceed its production targets during this timeframe, thus it does not need to make compensations.
The previous plan, released in the third week of March, indicated the seven members would produce about 263,000 barrels per day below their targets from March to June 2026, aimed at addressing 4.203 million barrels per day of cumulative overproduction from January 2024 to February 2025, averaging 300,000 barrels per day monthly.
This new schedule considers the decision by these seven countries and Algeria to expedite the return of the 2.2 million barrels per day cut by increasing the group’s overall production target by 411,000 barrels per day in May—three times more than initially planned.
If fully implemented, these compensatory cuts should largely counteract the production increases permitted by the Opec+ group's planned unwind through the second half of 2026. At most, the cuts would exceed the planned increases for several months, including this month.
However, with Iraq and Kazakhstan being the main contributors to these compensatory cuts until mid-next year, full implementation is not guaranteed.
According to the Opec secretariat, Iraq, Kazakhstan, Russia, the UAE, Kuwait, Oman, and Saudi Arabia intend to produce about 305,000 barrels per day under their combined targets on average from April to June 2026. This adjustment is to account for a total overproduction of 4.573 million barrels per day from January 2024 to March 2025. This amount reflects the cumulative overproduction during that period rather than a monthly average, equating to an average monthly excess of 305,000 barrels per day.
Algeria is the only member that did not exceed its production targets during this timeframe, thus it does not need to make compensations.
The previous plan, released in the third week of March, indicated the seven members would produce about 263,000 barrels per day below their targets from March to June 2026, aimed at addressing 4.203 million barrels per day of cumulative overproduction from January 2024 to February 2025, averaging 300,000 barrels per day monthly.
This new schedule considers the decision by these seven countries and Algeria to expedite the return of the 2.2 million barrels per day cut by increasing the group’s overall production target by 411,000 barrels per day in May—three times more than initially planned.
If fully implemented, these compensatory cuts should largely counteract the production increases permitted by the Opec+ group's planned unwind through the second half of 2026. At most, the cuts would exceed the planned increases for several months, including this month.
However, with Iraq and Kazakhstan being the main contributors to these compensatory cuts until mid-next year, full implementation is not guaranteed.