OPEC is working on a mechanism to set oil production baselines for 2027, aiming to assess each country’s maximum production capacity. This task was assigned to OPEC headquarters by the 22-member OPEC+ group, which includes allies like Russia. While discussions on new baselines have been ongoing for years, disagreements persist due to varying national production capacities. Countries like the UAE and Iraq seek higher quotas, while others, especially in Africa, face declining output. Angola left the group in 2024 over a production target dispute. Meanwhile, separate talks may lead to an accelerated output increase in July.
OPEC+ has implemented three output cut agreements since 2022, with two lasting through 2026 and one currently being phased out by eight members. No changes were made to output policy at Wednesday’s meeting. These eight members may agree to a July output hike of 411,000 barrels per day, matching May and June levels. The 2027 baselines could guide future production once current cuts expire. Oil prices fell below $60 in April but have since rebounded to around $65.
Earlier this month, sources informed Reuters that the eight countries might not only raise output in July but also fully reverse the latest production cut by the end of October
