OPEC+ to Address Kazakhstan's Quota Breach and Compensation Plan at Upcoming Meeting - Reuters

The eight OPEC+ member countries will address Kazakhstan’s breach of its oil production quota and discuss the republic’s plan to compensate for the overproduction at a meeting scheduled for Thursday, Orda.kz reports, citing Reuters.

Kazakhstan's record-breaking oil output has sparked dissatisfaction among several OPEC+ members, including Saudi Arabia, the group's largest producer. The alliance insists that Kazakhstan, like all other members, must offset its overproduction through additional cuts.

According to one Reuters source familiar with the matter, the meeting is necessary so that Kazakhstan's new Minister of Energy "understands the importance" of maintaining production discipline and compensation obligations. The source requested anonymity.

Neither Kazakhstan's Ministry of Energy nor the OPEC headquarters has publicly commented on the situation.

Kazakhstan's leadership in the energy sector changed in March, with Yerlan Akkenzhenov replacing Almasadam Satkaliyev, who transitioned to a role in the newly formed atomic energy agency.

Under existing agreements, eight OPEC+ nations — Russia, Saudi Arabia, the UAE, Kuwait, Iraq, Algeria, Kazakhstan, and Oman — are set to increase total oil output by 135,000 barrels per day in May.

Sources confirmed the alliance plans to adhere to this target as part of a gradual rollback of the 2.2 million barrels per day in cuts introduced this month. An additional 3.65 million bpd in cuts will remain in place until the end of 2025.

Meanwhile, in a move likely to impact Kazakhstan’s output, Russia has ordered the shutdown of two out of three Black Sea mooring points through which Kazakh oil is exported. This action is expected to reduce production levels in the short term significantly.

Energy expert Olzhas Baidildinov previously warned that the temporary closure of two out of three mooring units operated by the Caspian Pipeline Consortium (CPC) could cost Kazakhstan up to $400 million per month.

If restrictions persist, he said, the country may be forced to scale down production at its major oil fields — Tengiz, Kashagan, and Karachaganak — within a week.

Such a move would strain the state budget and disrupt operations for oil companies, for whom halting and restarting production is a costly and complex process.

The shutdown followed an unscheduled inspection related to a fuel oil spill in the Kerch Strait.

Original Author: Artyom Volkov