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 >
Immunic Gets US Patent Notice of Allowance For Specific Polymorph of Vidofludimus Calcium
Immunic Gets US Patent Notice of Allowance For Specific Polymorph of Vidofludimus Calcium
Mar 21, 2024
12:56 PM EDT, 03/21/2024 (MT Newswires) -- Immunic ( IMUX ) said Wednesday it has received a notice of allowance from the US Patent and Trademark Office covering a specific polymorph of vidofludimus calcium, its lead drug candidate. The firm said its multi-layered intellectual property strategy provides protection into 2041 in the US and into 2039 internationally. Vidofludimus calcium is...
Microsoft agreed to pay Inflection $650 mln while hiring its staff, Information reports
Microsoft agreed to pay Inflection $650 mln while hiring its staff, Information reports
Mar 21, 2024
March 21 (Reuters) - Microsoft ( MSFT ) has agreed to pay Inflection about $650 million while hiring the AI startup's staff, the Information reported on Thursday, citing a person involved in the deal. ...
Microsoft agreed to pay Inflection $650 million while hiring its staff, Information reports
Microsoft agreed to pay Inflection $650 million while hiring its staff, Information reports
Mar 21, 2024
(Reuters) - Microsoft ( MSFT ) has agreed to pay Inflection about $650 million while hiring the AI startup's staff, the Information reported on Thursday, citing a person involved in the deal. ...
Western Exploration Announces Fully Allocated Non-Brokered Private Placement Of Near $6 Million In Units
Western Exploration Announces Fully Allocated Non-Brokered Private Placement Of Near $6 Million In Units
Mar 21, 2024
12:57 PM EDT, 03/21/2024 (MT Newswires) -- Western Exploration Inc. ( WEXPF ) Thursday announced the terms of a non-brokered private placement offering of units of the company at a price of $0.70 per unit for gross proceeds of approximately $6 million. Each unit will consist of one variable voting share of the company and one variable voting share purchase...
Copyright 2023-2026 - www.financetom.com All Rights Reserved