Members of the Organization of the Petroleum Exporting Countries Plus (OPEC+) have taken steps to address their overproduction relative to set quotas. Iraq and Kazakhstan, which exceeded their production targets by several hundred thousand barrels per day in the first quarter of the year, have presented detailed plans to the alliance for compensatory cuts.

The Energy Ministry of Kazakhstan confirmed that it has finalized its schedule for the compensatory reductions through an email communication. On the other hand, an anonymous official familiar with the situation disclosed to Bloomberg that Iraq has also submitted its proposal. As of now, the Iraqi Oil Ministry has not released any official statements regarding their plan.

These developments follow the OPEC+ coalition's decision, led by Saudi Arabia and Russia, to implement additional production cuts at the start of 2024. This strategic move was aimed at preventing a potential global oil surplus amidst concerns over economic growth in major oil-consuming countries. The intervention has been partially successful in stabilizing oil prices, with Brent crude futures hovering around $90 per barrel.

Despite their commitments, both Iraq and Kazakhstan have faced challenges in adhering to the production limits set by OPEC+. Iraq has been focusing on revenue generation as part of its efforts to rebuild its economy after years of conflict. Meanwhile, Kazakhstan has been in the midst of expanding its production capabilities.

The upcoming meeting of OPEC+ on June 1 is anticipated to be a critical juncture for the alliance as it will consider the direction of output policies for the latter half of the year. In the lead-up to this meeting, OPEC Secretary General Haitham Al Ghais cautioned industry participants and analysts against making hasty predictions about the demise of crude oil. He emphasized that such predictions could lead to energy policies that may contribute to "energy chaos."

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