Kazakhstan, Iraq and Russia have officially announced that they have fully met their obligations under the oil production compensation plans presented in September. Representatives from the three countries made this statement during the 55th Joint Ministerial Monitoring Committee (JMMC) meeting, which reviewed crude oil production data and current market conditions.
All three countries have confirmed their commitment to maintaining these obligations until the end of the agreement. According to OPEC+, the final estimate of last month’s oil production will be available next week. The cartel has not issued any new recommendations regarding the current level of oil output.
The monitoring committee emphasized the critical importance of meeting obligations and implementing compensations. They also stated that they will continue to monitor whether oil producers comply with their commitments and will conduct regular assessments of market conditions.
The next JMMC meeting is scheduled for December 1, when the cartel is expected to hold a full meeting.
Last week, Saudi Arabia’s Minister of Energy, Abdulaziz bin Salman, warned that oil prices could drop to $50 per barrel if Kazakhstan and Iraq exceed their OPEC+ quotas. He cited that Iraq was producing 400,000 barrels per day above its quota, and Kazakhstan’s oil output is projected to increase by 720,000 barrels per day after the Tengiz expansion project is completed.
For many OPEC+ delegates, the Saudi minister’s warning is perceived as a threat and an indication of readiness to initiate a price war, as Saudi Arabia seeks to maintain its current market share. The issue of easing oil production restrictions will be further discussed in December.
In response, Saudi Arabia announced its readiness to abandon its unofficial target of $100 per barrel for Brent oil and increase its oil output starting on December 1 to regain market share. Furthermore, Riyadh may boost production even earlier if Kazakhstan and Iraq fail to meet their output reduction commitments under the OPEC+ agreement.
Oil prices have been declining for several consecutive months. In the last quarter, prices fell by approximately 16%, prompting OPEC to urge member states to cut production to stabilize the market. As a result, OPEC’s market share has dropped from 51% in 2022 to 48%.
Kazakhstan’s oil production exceeded its OPEC+ commitments in early 2024. At that time, the country’s Ministry of Energy promised to compensate for the overproduction by May but has since extended the deadline several times.
Both Iraq and Kazakhstan have prepared new compensation schedules to offset the excess output from August. In October, Kazakhstan plans to reduce production by 265,000 barrels per day from its total output of 699,000 barrels per day (a 38% reduction) due to an overhaul at the Kashagan oil field.
