OPEC+ Meeting on Oil Production
The OPEC+ plans to meet on May 5 to discuss a possible expansion of oil production starting in June, despite falling crude oil prices. This meeting is accompanied by an internal dispute within the cartel that could influence production decisions.
Background and Motivation
- Internal Dispute: Kazakhstan’s energy minister, Erlan Akkenzhenov, recently emphasized that his country will prioritize national interests over those of OPEC+, leading to uncertainties. Although he later clarified his statements, this has created tensions within the cartel.
- Falling Oil Prices: Crude oil prices have dropped in recent weeks, which would typically lead to a reduction in production volumes to stabilize prices. Instead, there are reports that several member states are planning to increase production.
Involved Countries and Plans
- Involved Countries: The eight countries that have voluntarily cut their production are Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman. These countries plan to gradually increase their production by the end of September 2026 to bring the originally cut 2.2 million barrels per day back to the market.
- Production Plans: The planned increase in oil production could further pressure global oil prices, as it could exceed demand. This could lead to a further decline in prices, which is undesirable for OPEC+ members.
Market Reactions and Geopolitical Factors
- Market Reactions: Oil prices have fluctuated significantly in recent weeks, with a decline of 5 to 7% last week due to weak economic data from the USA and China.
- Geopolitical Factors: Geopolitical tensions, such as tariff threats against OPEC+ members, could affect supplies and potentially nullify the planned production increases.
Overall, it appears that OPEC+ is determined to increase oil production despite the challenges of falling oil prices and internal tensions. However, this could lead to further market volatility and exacerbate geopolitical tensions.