Kazakhstan Failed to Meet OPEC+ Target for Cutting Oil Output - BNN Bloomberg
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Kazakhstan has once again exceeded OPEC+ oil production quotas, Orda.kz reports.
BNN Bloomberg notes that Kazakhstan's October decline in oil production did not facilitate its fulfillment of the established production quota. According to OPEC, the country produced 1.29 million barrels per day — 292 thousand barrels per day less than in September but 90 thousand more than was supposed to be per agreements.
Meanwhile, Kazakhstan has pledged to cut oil production to make up for overproduction in recent months, which could lead to the country seeing its quotas cut even further in 2025.
The government in Astana is now likely to come under increased pressure when OPEC+ oil ministers meet on Dec. 1 to set production plans for next year. So too is that of Iraq, the group’s other big over-producer, writes BNN Bloomberg.
OPEC+ has already postponed plans twice to ease oil production quotas. The organization was set to increase production in October, but the deadline was postponed to January. Some analysts expect no quota relaxations at the beginning of next year either.
Kazakhstan hoped to reduce oil production and partially compensate for overproduction through scheduled repairs at Kashagan.
However, the repairs began later and were completed earlier. This is beneficial for partners who have invested huge sums in developing the field but will not help the Ministry of Energy much.
The situation may become increasingly uncomfortable for Kazakhstan, where operator TengizChevroil is expected to see the first fruits from an expansion of the giant Tengiz field in the second quarter of 2025. The project, estimated in March to cost $48.5 billion, will add about 260,000 barrels a day to Kazakhstan’s production capacity, BNN Bloomberg reports.
Such an increase may strain relations with fellow OPEC members.
In September, Kazakhstan exceeded OPEC+ quotas. Reports followed that Saudi Arabia was dissatisfied with this. They were reportedly ready to temporarily influence the market by releasing oil and dropping prices to $50 per barrel, which would have been a significant blow to Kazakhstan’s economy. OPEC has dismissed these claims.
Along with a potential OPEC+ response, Donald Trump's Administration may exert further pressure on prices to fulfill a campaign promise.
Original Author: Nikita Drobny
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