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Kazakhstan Prepares Plan to Compensate for Oil Overproduction

Kazakhstan raised oil and gas condensate production in June by 4% from May on a daily basis to 7.24 million metric tons. Reuters
Kazakhstan raised oil and gas condensate production in June by 4% from May on a daily basis to 7.24 million metric tons. Reuters
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Kazakhstan Prepares Plan to Compensate for Oil Overproduction

Kazakhstan raised oil and gas condensate production in June by 4% from May on a daily basis to 7.24 million metric tons. Reuters
Kazakhstan raised oil and gas condensate production in June by 4% from May on a daily basis to 7.24 million metric tons. Reuters

Kazakhstan will compensate for oil output exceeding its OPEC+ quota in the first half of this year by September 2025, its energy ministry said on Monday, adding that it has prepared a detailed plan for gradual compensation.

The country is among eight OPEC+ countries that had pledged extra voluntary output cuts. It did not provide any output figures, Reuters reported.

"Kazakhstan will make every effort to comply with its obligations and compensate for overproduction in accordance with the intended compensation plan," the ministry said in a statement.

Kazakhstan raised oil and gas condensate production in June by 4% from May on a daily basis to 7.24 million metric tons, exceeding its quota within the OPEC+ group of oil producers, according to two sources and Reuters calculations.

OPEC+ said last month that it would gradually phase out the production cuts over the course of a year from October 2024 to September 2025.

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OPEC+ Sticks to Oil Policy

The online joint ministerial monitoring committee meeting (JMMC) held on Thursday. Photo: OPEC on X
The online joint ministerial monitoring committee meeting (JMMC) held on Thursday. Photo: OPEC on X
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OPEC+ Sticks to Oil Policy

The online joint ministerial monitoring committee meeting (JMMC) held on Thursday. Photo: OPEC on X
The online joint ministerial monitoring committee meeting (JMMC) held on Thursday. Photo: OPEC on X

A meeting of top OPEC+ ministers has kept oil output policy unchanged including a plan to start unwinding one layer of output cuts from October, and repeated that the hike could be paused or reversed if needed.
Several ministers from the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+ as the group is known, held an online joint ministerial monitoring committee meeting (JMMC) on Thursday.
OPEC+ is currently cutting output by a total of 5.86 million barrels per day, or about 5.7% of global demand, in a series of steps agreed since 2022 to bolster the market amid uncertainty over global demand and rising supply outside the group.
In a statement after Thursday's meeting, OPEC+ said the members making the most recent layer of cuts - a 2.2 million bpd voluntary cut until September - reiterated that its gradual phase-out could be paused or reversed, depending on market conditions.
Russian Deputy Prime Minister Alexander Novak said on Thursday the current level of oil prices was comfortable for Russia, its budget, and other participants in the market. Supply and demand remained in balance, he added.
Algeria's Energy Minister Mohamed Arkab said uncertainties affecting oil markets were unlikely to continue for much longer, as long as the market remains adequately supplied.
Oil demand, he added, was expected to follow a sustained upward trend in the coming weeks.
OPEC+ agreed at its last meeting in June to phase out the 2.2 million bpd cut over the course of a year from October 2024 until September 2025. It also agreed then to extend earlier cuts of 3.66 million bpd until end-2025.
Soon after that, Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ could pause or reverse the production hikes if it decided the market is not strong enough.

Thursday's meeting also noted assurances from Iraq, Kazakhstan and Russia made during the meeting to achieve full conformity with pledged output cuts, the statement said. Those countries had earlier delivered plans to compensate for past overproduction.
An OPEC+ source said the chair of the meeting was insisting that members show commitment to the compensation plan.