This is the second time in just two months that the cartel's main participants have decided to raise the quota system above the rate agreed upon at the meeting held at the end of 2023.
Thus, OPEC+ production is estimated to be one million barrels per day higher than at the beginning of the year. This move apparently responds to a maneuver led by Saudi Arabia to pressure cartel members (mainly Iraq and Kazakhstan) that have repeatedly failed to meet their assigned quotas. The tension seems unlikely to be resolved in the short term. Just a few weeks ago, Kazakhstan's Energy Minister reiterated that the country will prioritize national interests over the cartel's agreed-upon targets.
The unexpected increase in production comes at a particularly sensitive time for the market, given the possibility that the global economic slowdown could translate into lower-than-expected oil demand. As a result, the price of a barrel of Brent crude, the European benchmark, has hovered around $60 in recent days, its lowest level in four years.
Source: CESCE
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