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5mo ago

OPEC+ Announces Larger Output Hike to Enforce Compliance

The group plans to raise June production by 411,000 barrels per day and signals further reversals of cuts if quota violations persist.

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Neighbors play board games under a sky lit by gas flares near Punta de Mata in eastern Venezuela on Nov. 5, 2022. Oil producing countries are bracing for a bumpy ride this year, with a precipitous drop in prices to the lowest levels in four years seen as the initial, alarming sign of looming turmoil.
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Overview

  • OPEC+ approved a 411,000 barrels per day production increase for June, nearly triple the originally planned hike.
  • The move is part of a strategy led by Saudi Arabia to discipline members like Iraq and Kazakhstan for exceeding their production quotas.
  • The group may accelerate the reversal of 2.2 million barrels per day in voluntary cuts by October if compliance does not improve.
  • Oil prices have dropped to around $58 per barrel, the lowest since early 2021, due to oversupply, weak demand, and U.S. tariffs.
  • Major oil firms, including Chevron, are adjusting strategies, with Chevron reducing share buybacks in response to market softness.