Eight members of the Organisation of the Petroleum Exporting Countries and their allies, together known as OPEC+, have hinted at plans to further accelerate oil output hikes, amid the latest step to unwind the group’s most recent layer of output cuts for June.
A new report by Reuters, which was published on Sunday, said the countries may unwind their 2.2 million barrels per day of voluntary cuts by the end of October if members do not improve compliance with their production quotas.
OPEC+ shocked the oil market in April by agreeing on a faster-than-expected unwinding of cuts despite weak prices and demand.
The move was designed by OPEC+ leader, Saudi Arabia, to punish some members for poor quota compliance, sources have said.
OPEC+, which includes the Organisation of the Petroleum Exporting Countries and allies such as Russia, agreed another big output hike for June on Saturday, taking the total it plans to release in April, May, and June to nearly one million bpd.
OPEC+ will maintain the trend and will likely agree in June to release another 411,000 bpd in July.
It said the group will likely approve accelerated hikes for August, September, and October, with the idea of unwinding the remainder of a big portion of voluntary cuts if Iraq, Kazakhstan, and other laggards do not improve compliance and deliver compensation cuts, the sources said.
If compliance does not improve, the voluntary cuts will be unwound by November, one of the sources said, referring to the 2.2 million bpd portion of OPEC+’s voluntary cuts by eight members.
OPEC+ is still cutting output by almost five million bpd, and many of the cuts are due to remain in place until the end of 2026.
In December, OPEC+ agreed to gradually phase out the 2.2 million bpd voluntary part of total cuts by the end of September 2026, but agreed to accelerate this process in April.
Oil prices fell to a four-year low in April below $60 per barrel on accelerated OPEC+ hikes and as US President Donald Trump’s tariffs raised concerns about a global economic slowdown.
Reuters reported that Saudi officials have briefed allies and industry officials that they are unwilling to prop up oil markets with further supply cuts.
Kazakhstan defied OPEC+ this month when its energy minister said he would prioritise national interests over those of the OPEC+ group when deciding on oil production levels. Kazakhstan’s April oil output.
OPEC, the Saudi government’s communications office, and the office of Russian Deputy Prime Minister Alexander Novak did not immediately reply to a request for comment.