In a meeting scheduled for Thursday, eight OPEC+ member countries will convene to address the pressing issue of Kazakhstan’s consistent overproduction of its assigned output quota, Reuters reported on Wednesday.
The primary focus of the discussions will revolve around strategising effective ways to persuade Kazakhstan to adhere to its quota and to outline a concrete plan to compensate for the excess oil it has already produced.
These deliberations come at a time when the Organization of the Petroleum Exporting Countries and allies are actively implementing a phased approach to increase overall production levels, making Kazakhstan’s non-compliance a matter of significant concern for the alliance.
Discontent with Kazakhstan’s overproduction
Kazakhstan’s substantial oil output has generated discontent among several OPEC+ members, notably Saudi Arabia, a leading producer within the group.
This discontent stems from Kazakhstan’s overproduction, which has prompted OPEC+ to urge the Central Asian nation to implement additional production cuts.
These cuts are intended to offset the excess production and maintain stability within the global oil market.
One of the delegates was quoted in the report:
Tomorrow’s meeting is just to make the new Kazakhstan minister aware of the importance of meeting his required production and compensating for the surplus.
In a recent cabinet reshuffle last month, Kazakhstan’s President Kassym-Jomart Tokayev appointed Erlan Akkenzhenov as the country’s new Minister of Energy.
Akkenzhenov’s predecessor, Almasadam Satkalipov, was not removed from the energy sector entirely; instead, he was selected to lead Kazakhstan’s newly established atomic energy agency.
This move highlighted the country’s growing focus on nuclear power as a potential energy source and its commitment to expanding its energy sector in a diversified and responsible manner.
OPEC raises output
This month, eight members of the OPEC+ group, along with Saudi Arabia and Russia, are expected to raise oil production by unwinding some of their voluntary output cuts of 2.2 million barrels per day.
This planned increase will see an additional 135,000 barrels of oil per day entering the global market.
The move comes as part of the group’s ongoing efforts to manage oil supply and stabilise prices amid a fluctuating global energy landscape.
The cartel had extended production cuts several times last year due to poor global demand.
Furthermore, media reports had indicated that the group is expected to continue with the planned increase in May as well.
Russia, Saudi Arabia, UAE, Kuwait, Iraq, Algeria, Kazakhstan, and Oman are the members and allies of OPEC who have been adhering to the voluntary oil output cuts since the start of 2024. The May hike is the next increment of this plan.
Steep output cuts
OPEC+ has also been cutting oil supply by an additional 3.65 million barrels per day on top of the 2.2 million barrels a day voluntary reductions.
The 3.65 million barrels per day of oil output cut is scheduled to expire at the end of 2026.
This week, Russia’s closure of two of the three moorings at the Black Sea terminal responsible for Kazakhstan’s oil exports is expected to significantly reduce the country’s oil production.
An OPEC+ ministerial committee, which can suggest changes in production policy to the larger group, was originally planned to convene on April 5. However, the report indicated that this meeting might instead occur on Thursday.
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