Key OPEC+ countries led by Saudi Arabia will meet on May 3 -- two days ahead of schedule -- to decide whether to aggressively hike production quotas again, sources told Platts, as tensions over output discipline and market share rub against angst about low oil prices.

The eight OPEC+ members that have implemented a series of voluntary cuts surprised the market in April and worsened the price slump by announcing a 411,000 b/d rise in quotas for May -- three times higher than they had previously signaled. Some delegates and analysts say a similar plan could be enacted for June.

The decision is expected to be announced after ministers of those eight countries -- Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman -- hold formal talks May 3, just ahead of when many of their national oil companies are set to announce official selling prices and make term allocations for June loadings.

The meeting was initially scheduled for May 5, but was moved forward at the last minute on May 2, sources said. The reason for the late change was not clear.

"The ministers will discuss the market. Our position is to absolutely maintain the group's cohesion and not add uncertainty to uncertainty," one OPEC+ delegate said on condition of anonymity.

Another delegate, however, said they would not support a policy that will "'accelerate a deterioration of the market" -- an indication that there might not be universal appetite for further production rises that pressure prices, which are already reeling from the US-initiated global tariff escalation.

Platts, a part of S&P Global Commodity Insights, assessed Dated Brent at a four-year low of $61.54/b on May 1 -- down from $72.49/b on April 3, when the May quota increase was announced.

Idled capacity

Discord within the group has also been a challenge, with some producers persistently producing above their quotas and missing targets to compensate for earlier overproduction.

Some delegates have said that the May production hike was a warning to overproducers, particularly Iraq and Kazakhstan, to improve compliance.

One said that it does not, however, signal an all-out battle for market share, similar to the April 2020 price war that sent WTI into negative territory for the first time during the depths of the COVID-19 pandemic, when Russia refused to go along with a Saudi-led plan for large-scale production cuts. The two OPEC+ co-chairs would, a few weeks later, patch up their differences and agree to historic cuts under a deal partially brokered by US President Donald Trump.

This time around, OPEC+ officials say, the group has an existing production accord that is largely satisfactory to all sides, and on the demand side, even the potential macroeconomic pressures caused by retaliatory tariffs do not approach the cataclysmic impact of COVID-19.

Many forecasters, including those at OPEC, have recently cut their demand outlooks. In its latest monthly oil market report, OPEC revised down its global crude demand growth forecasts by 150,000 b/d for 2025 and 2026. It now sees demand growth of 1.3 million b/d in 2025 and 1.28 million b/d in 2026.

Analysts at S&P Global Commodity Insights said that the group is now prioritizing reducing its giant spare capacity cushion over defending a certain price level.

Commodity Insights estimates global spare capacity, concentrated in Gulf OPEC producers, at 5.7 million b/d in April -- up from 3.1 million b/d at the beginning of 2023.

"Boosting output now could pay off in the years ahead, but at a cost of lower prices this year and perhaps next as well," they said in a recent note.

Offsetting volumes

Any OPEC+ quota hikes could be offset by improved adherence to pledged compensation cuts. Aside from Algeria, which has consistently met its quota, all other members of the group have committed to compensation cuts, with the combined total for May set at 378,000 b/d.

But the group has struggled to meet these targets. OPEC+ crude production hit an eight-month high of 41.04 million b/d in March, according to the latest Platts survey of the group's output. Producers with quotas pumped 319,000 b/d above target in March, compared with overproduction of 294,000 b/d in February, the survey found.

Harsher sanctions on Iran and Venezuela -- which have been threatened since Trump took office in January -- could take further barrels off the market.

Meanwhile, potential agreements on reducing tariffs could further support demand.

Roukaya Ibrahim, commodity and energy strategist at BCA Research said that there is a clear shift in OPEC+ strategy on voluntary cuts, which were never intended to be permanent.

"Further production cuts -- which would be required to boost prices to fiscal breakeven levels -- would extend the decline in market share. Therefore, the longer the production cuts are implemented, the greater the risk of compliance fatigue and intra-coalition tensions," she said.