OPEC+ is once again grappling with the thorny question of how much oil its members are actually capable of pumping, an issue that poses risks for the group’s efforts to stabilize world markets.
After a fierce debate on the matter last year — ultimately leading to the exit of Angola — the alliance led by Saudi Arabia commissioned an external review of its members capabilities, to be concluded by the end of June. Several major exporters are seeking to have their levels upgraded, with a view to securing the right to pump more crude in 2025.
The United Arab Emirates, Kazakhstan, Iraq, Kuwait and Algeria are among countries whose potential to pump more next year is under scrutiny, according to people familiar with the discussions who asked not to be identified because the information isn’t public. Some have pushed for an upward revision, causing tough talks with the outside consultants that are judging the matter, they said.
The Organization of Petroleum Exporting Countries and its partners have been restraining oil output in a bid to stave off a surplus and shore up crude prices. JPMorgan Chase & Co. warns that the group — which already holds considerable idle capacity — could struggle to manage markets next year, when demand growth is set to slow and rival supplies to climb.
The 22-nation alliance is widely expected to prolong its current curbs into the second half of this year when it gathers on June 1. It may also use the gathering to discuss the capacity review, according to UBS Group AG.
Whether that debate could impinge on the decision at the meeting, as it has done in the past, is unclear.
