The group, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has been discussing new baselines, production levels from which each member makes cuts or increases, for the last few years [GETTY]
OPEC+ agreed on Wednesday to establish a mechanism for setting baselines for its 2027 oil production, while OPEC+ sources said that separate talks on Saturday could agree on a further accelerated oil output hike for July.
The group, which includes the Organisation of the Petroleum Exporting Countries and its allies, such as Russia, has been discussing new baselines —production levels from which each member makes cuts or increases —for the last few years.
Baselines and quotas are controversial because some members, such as the United Arab Emirates and Iraq, have increased their production capacity, thereby pressing the case for higher quotas, while others, including African members, have seen declines. Angola quit the group in 2024 over a disagreement on its production target.
On Wednesday, the 22-member group tasked OPEC headquarters with developing a mechanism to assess countries’ maximum production capacity, to be used as reference for 2027 output baselines for all countries, OPEC+ said in a statement.
OPEC+ pumps about half the world’s oil and has agreed on three layers of output cuts since 2022 to support the market.
Two of these are in place until the end of 2026, and one is currently being unwound by eight members. Wednesday’s meeting did not change any of these policies.
On Saturday, eight OPEC+ members who are in the process of gradually raising output are set to meet and may agree on an output hike for July of 411,000 barrels per day, the same as in May and June, two delegates said. They declined to be identified by name due to the sensitivity of the matter.
The May and June hikes are faster than originally planned and have weighed on oil prices. The strategy of group leaders Saudi Arabia and Russia is partly to punish over-producing allies and to win back market share, Reuters has reported.
OPEC+ itself cited “the current healthy market fundamentals, as reflected in the low oil inventories”, as its reasoning for the June production decision on 3 May.
The 2027 baselines, in theory, could be incorporated into production policy when all current output cuts expire.
Oil prices fell to a four-year low in April, below $60 per barrel, after OPEC+ announced it would accelerate its output hike in May, and as U.S. President Donald Trump’s tariffs raised concerns about global economic weakness. Since then, it has recovered to about $65.
Earlier this month, sources told Reuters that the eight countries, in addition to a 411,000 bpd output hike for July, may unwind the remainder of the most recent cut by the end of October.
OPEC itself also met on Wednesday and only discussed administrative matters, a source said. OPEC+ will hold its next meeting on 30 November.
(Reuters)
