OPEC+ Delegates Urge Kazakhstan to Comply with Oil Production Quotas Amid Rising Tensions
By Ahmad Ghaddar and Alex Lawler LONDON (Reuters) - In a critical meeting scheduled for Thursday, representatives from eight OPEC+ nations are set to address ongoing concerns regarding Kazakhstan's compliance with its oil production quota. This gathering comes at a time when Kazakhstan's output has surged to record levels, aggravating tensions among member countries, particularly with Saudi Arabia, the leading oil producer within the group. According to two delegates familiar with the negotiations, the primary aim of this meeting is to highlight the necessity for Kazakhstan to adhere to its production limits and to discuss plans for compensating its surplus production. "Tomorrow's meeting is primarily to make the new Kazakh minister aware of the importance of meeting his required production and compensating for the surplus," one delegate stated, requesting anonymity due to the sensitive nature of the discussions. The Kazakh Energy Ministry, along with representatives from OPEC, has not yet responded to requests for comments regarding these issues. The political landscape in Kazakhstan recently shifted with the appointment of Erlan Akkenzhenov as the new Minister of Energy, a role he assumed after his predecessor was appointed to lead the newly established atomic energy agency. This transition in leadership may play a pivotal role in the ongoing negotiations within OPEC+, as the new minister will need to navigate the pressures from other member states. OPEC+, a coalition that includes the Organization of the Petroleum Exporting Countries and several allied producers led by Russia, is planning to implement an increase in oil output by 135,000 barrels per day in May. This decision is part of a broader strategy to gradually reverse the output cuts that were originally set at 2.2 million barrels per day, a measure put in place to stabilize the oil market amid fluctuating global demand. Both delegates confirmed that the group is likely to proceed with this production increment, which aligns with previous statements made by other OPEC+ representatives earlier in the week. This planned increase is a continuation of a coordinated effort by member countries, including major players like Russia, Saudi Arabia, the UAE, Kuwait, Iraq, Algeria, Kazakhstan, and Oman, to gradually unwind their collective output restrictions. In addition to the forthcoming production hike, OPEC+ has also enforced 3.65 million barrels per day in additional output cuts that are scheduled to remain in effect until the end of next year. These measures reflect the group's ongoing efforts to manage oil supply in response to global market dynamics. Adding to Kazakhstan's challenges, the Russian government recently directed the closure of two out of three moorings at the Black Sea terminal responsible for handling Kazakh oil exports. This decision is anticipated to significantly curtail Kazakhstan's production capabilities, further complicating its compliance with OPEC+ quotas. Originally, the OPEC+ ministerial committee, which holds the authority to recommend changes to the overall production policy, was slated to convene on April 5. However, there are indications that this meeting may now also take place on Thursday, potentially coinciding with the discussions on Kazakhstan’s compliance. As OPEC+ navigates these complexities, the outcome of the meeting could have far-reaching implications for the stability of oil prices and geopolitical relations among member states.