OPEC+ is likely to implement another super-sized output hike in July, marking the third consecutive month of aggressive production increases, according to analysts at DNB Markets. This anticipated move follows persistent overproduction by Kazakhstan, which continues to exceed its quota within the alliance.
DNB analysts Helge Andre Martinsen and Tobias Ingebrigtsen noted that Saudi Arabia may be forced to push for a higher OPEC+ output hike to maintain its credibility. “Kazakhstan continues to overproduce massively above its OPEC+ quota, and Saudi cannot walk back on its threats of punishing the cheaters without losing credibility, so it leaves Saudi with no choice,” they explained.
The OPEC+ alliance had already agreed to increase output by 411,000 barrels per day in both May and June. This decision was widely interpreted as a strategic move to drive oil prices lower and pressure non-compliant members to adhere to agreed quotas.
The next OPEC+ meeting, scheduled for June 1, will focus on determining July production levels. All eyes are on how the group will handle internal discipline while balancing market dynamics.