Iraq, Kazakhstan, five other OPEC+ members pledge new compensation cuts

Iraq, Kazakhstan and five other OPEC+ members implementing 2.2 million b/d of voluntary production cuts have submitted updated their compensation plans, the group said April 16, as it aims to make up for previous overproduction.

In a statement, the OPEC secretariat in Vienna said the seven producers -- Iraq, Kuwait, Saudi Arabia, UAE, Kazakhstan, Oman and Russia -- would trim production by 222,000 b/d in April, 378,000 b/d in May and 431,000 b/d in June.

Monthly cuts would then range between 196,000 b/d and 501,0000 b/d over the following 12 months, ending in June 2026.

Perennial quota busters Iraq and Kazakhstan are planning the biggest compensation cuts, at 1.934 million b/d and 1.299 million b/d cumulatively, the OPEC statement said.

The UAE has also overproduced in recent months, according to the Platts OPEC+ Survey from S&P Global Commodity Insights, but will compensate by just 386,000 b/d cumulatively through June 2026 after agreeing a 300,000 b/d production baseline hike in April.

Front-month ICE Brent futures rose 0.6% as of 0835 GMT April 16, partly on the OPEC statement, but market participants and analysts say compensation cuts have generally not been honored.

Previous rounds of promised reductions have failed to materialize, including from Iraq and Kazakhstan, which exceeded their quotas by 70,000 b/d and 332,000 b/d, respectively, in March, according to the Platts survey.

Kazakhstan's overproduction is related to the earlier-than-expected ramp-up of the expansion of its huge Tengiz field by a consortium of foreign companies.

Market shocks

The seven countries and Algeria had previously delayed on three occasions plans to gradually reintroduce 2.2 million b/d of crude, but opted to start with 138,000 b/d in April.

They then shocked the market by announcing April 3 that they would pump an additional 411,000 b/d in May, pouring fuel on a crude selloff triggered by the US President Donald Trump's tariffs on trading partners. The dual shocks caused the Platts-assessed Dated Brent to fall almost $15/b in the first nine days of April.

If the voluntary cutters' compensation cuts are implemented, it would amount to an effective cut in April and an increase of 33,000 b/d in May, according to OPEC's figures.

Despite the tariff uncertainty and fears of a global economic slowdown, OPEC in its latest monthly oil market report said it still expects crude demand to grow 1.3 million b/d in 2025 and by 1.28 million b/d in 2026, although these were down 150,000 b/d from its previous forecasts.

OPEC+ compensation cut plans: