By: AGBI

Opec has received updated plans for seven countries including Saudi Arabia and the UAE to make further oil output cuts to compensate for pumping above agreed quotas, the group said on Wednesday.

Opec+, which includes Opec plus Russia and other allies, has implemented a series of output cuts since late 2022. Its compensation plan is designed to ensure that members who do not make the cuts in full implement further reductions. 

The latest plan requires seven nations to cut output by a further 369,000 barrels per day (bpd) in monthly steps between now and June 2026, compared with an earlier plan running from March until next June, according to Reuters calculations. 

Under the latest plan, monthly cuts will range from 196,000 bpd to 520,000 bpd from this month until June 2026, up from between 189,000 bpd and 435,000 bpd previously. 

Should the latest cuts be made in full, the compensation plan would to a large extent offset a planned 411,000 bpd output increase being made by other members of Opec+ in May, providing additional support for the oil market.

The seven members making the cuts are Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan and Oman. Algeria has no required cut.

Opec+ has repeatedly revised the plan after countries did not make the cuts as pledged.

Iraq, the group’s largest overproducer, plans to step up efforts to deliver on its compensation cuts. A source said its crude allocations to customers for May cargoes are much lower.

“We need more reduction to meet the compensation plan,” the source said.

Iraq needs to compensate for a total of 1.93 million bpd of overproduction by June 2026. Kazakhstan needs to make the second-largest cut of 1.3 million bpd in the same timeframe.