financetom
Business
financetom
/
Business
/
Exclusive-Kazakh overproduction helped sway OPEC+ to approve output hike, sources say
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Exclusive-Kazakh overproduction helped sway OPEC+ to approve output hike, sources say
Mar 4, 2025 10:38 AM

By Maha El Dahan, Olesya Astakhova and Alex Lawler

DUBAI/MOSCOW/LONDON (Reuters) - As OPEC+ debated whether to keep oil output steady due to weak global demand or pump more in response to internal pressure and a call from U.S. President Donald Trump, it was record output from Kazakhstan that helped sway the decision, sources told Reuters.

OPEC and its allies including Russia, a group known as OPEC+, decided on Monday to increase output for the first time since 2022. It said its decision took into account healthy market fundamentals and a positive market outlook, without mentioning Kazakhstan.

The group will make a small increase of 138,000 barrels per day from April, the first step in planned monthly increases to unwind its nearly 6 million bpd of cuts, equal to nearly 6% of global demand.

OPEC+ member Kazakhstan is producing at a record high and well above its target, as agreed with the producer group after U.S. oil major Chevron finished a major expansion at the country's Tengiz oilfield.

Several other members of the group including top producer Saudi Arabia were angered by the rising output from Kazakhstan, three OPEC+ sources told Reuters. The sources declined to be identified by name due to the sensitivity of the matter.

OPEC's headquarters, the Saudi government communications office and the office of Russian Deputy Prime Minister Alexander Novak did not immediately respond to requests for comment.

The three sources said the argument inside OPEC+ was that it makes little sense to continue capping production if some of OPEC+'s own members are overproducing.

"It's very bad for discipline inside OPEC+ and they (OPEC+) will be pushing Kazakhstan hard to compensate," one of the sources said.

Compliance from OPEC+ members with their individual output targets under the collective output agreement has worsened over the past year.

Oversupply from Kazakhstan, Iraq, Russia and the UAE has irked OPEC's de facto leader, Saudi Arabia, which has kept strictly to its output target and is making the deepest cuts.

Until recently, OPEC+ had been reasonably successful in keeping to the targets agreed since 2022. The group has asked members that have overproduced to compensate with deeper cuts in coming months.

On Monday, OPEC+ said members pledged to comply better and compensate for overproduction.

Kazakhstan raised crude and condensate output in February to a record high of 2.12 million bpd. Its OPEC+ quota doesn't regulate condensate production and the quota for crude output is set at 1.468 million bpd.

OPEC+ has repeatedly named Kazakhstan among countries that produce above their crude quota.

Top oil producers in Kazakhstan include both Chevron and Exxon Mobil. Export volumes are decided by the government.

TRUMP FACTOR

OPEC+'s production decision comes after Trump renewed pressure on OPEC and Saudi Arabia to bring down prices. He pledged in his election campaign to reduce pump prices for the U.S. population.

Trump's public push for more oil from OPEC+ was not a factor in the group's discussions, sources said.

The production hike suited some members such as the United Arab Emirates and Russia, the sources said.

The UAE has been pushing for an increase for the past two years as it is keen to use its growing spare production capacity.

Russia was motivated by a view that going ahead with the OPEC+ increase would help Moscow in its relations with U.S., two of the sources said.

"Moscow can appear aligned with the White House while not fundamentally breaking ranks with OPEC," said Helima Croft of RBC Capital Markets.

Trump upended U.S. policy on Ukraine and Russia upon taking office in January, opening talks with Moscow aimed at ending the war.

If Trump were to ease sanctions on Moscow as part of a peace process, Russia would benefit from higher revenue and possibly increased exports.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Botox Innovator Revance Therapeutics Goes Private In Over $900M Deal
Botox Innovator Revance Therapeutics Goes Private In Over $900M Deal
Aug 12, 2024
Crown Laboratories, Inc., a privately held player in the skincare industry, agreed on Monday to acquire Revance Therapeutics, Inc. ( RVNC ) . Under the terms of the agreement, Crown will commence a tender offer to acquire all outstanding shares of Revance’s common stock for $6.66 per share in cash, representing a total enterprise value of $924 million. The purchase price represents a...
Tourmaline Oil Maintained at Outperform at National Bank as it Acquires Crew Energy; Price Target Raised to $72.50
Tourmaline Oil Maintained at Outperform at National Bank as it Acquires Crew Energy; Price Target Raised to $72.50
Aug 12, 2024
12:12 PM EDT, 08/12/2024 (MT Newswires) -- National Bank Financial on Monday reiterated its outperform rating on the shares of Tourmaline Oil (TOU.TO) while raising its price target to C$72.50 from C$70.00 after the Western Canadian natural-gas focused producer agreed to acquire rival Crew Energy ( CWEGF ) for C$1.3 billion. TOU announced the $1.3 bln acquisition of Crew Energy...
Update: KE Holdings Shares Rise After Q2 Beat
Update: KE Holdings Shares Rise After Q2 Beat
Aug 12, 2024
12:09 PM EDT, 08/12/2024 (MT Newswires) -- (Updates with the stock price movement in the headline and the first paragraph.) KE Holdings ( BEKE ) shares were up 6.4% in recent Monday trading after the company posted its Q2 results that topped market expectations. The company reported Q2 adjusted earnings of 2.28 Renminbi ($0.32) per diluted share, up from 1.96...
CDW Launches Tender Offers for Certain Notes
CDW Launches Tender Offers for Certain Notes
Aug 12, 2024
12:06 PM EDT, 08/12/2024 (MT Newswires) -- CDW (CDW) said Monday it has started cash tender offers to buy any and all of the outstanding 5.5% senior notes due 2024 and 4.125% senior notes due 2025 issued by its CDW LLC and CDW Finance units. The company said the notes due 2024 and 2025 have an aggregate principal amount outstanding...
Copyright 2023-2026 - www.financetom.com All Rights Reserved