StanChart Warns OPEC+ Could Abandon Cuts at Next Meeting

In a report sent to Rigzone on Wednesday by the Standard Chartered team, Standard Chartered Bank Energy Research Head Emily Ashford warned that the next OPEC+ meeting on April 5 “could result in abandonment of voluntary output cuts and compensation cuts”.

“[The] OPEC+ meeting on April 5 could see compensation cuts and the slow return of barrels to the market abandoned in favor of increased output (where possible),” Ashford said in the report.

“The eight OPEC+ countries with additional voluntary adjustments could use the next meeting as an opportunity to fully unwind the remaining April 2023 adjustments and the compensation-cut schedule, to at least be seen to be responding to consumer pressure,” Ashford added.

“Returning real barrels to the market, particularly given logistical constraints on exports in the Gulf, will be more difficult to achieve,” Ashford warned.

In the report, Ashford highlighted that recent OPEC+ monthly meetings have been “low key, wrapped up quickly, with little fanfare, and limited excitement”. Ashford revealed that Standard Chartered expects the meeting due to take place on April 5 “to buck this recent trend”.

“At the last meeting the group agreed to accelerate its unwinding of the last portions of the April 2023 voluntary production adjustments, albeit fractionally,” Ashford pointed out.

“Compensation plans for overproduction were detailed, with the weight of supply adjustments falling on Kazakhstan (with a 619,000 barrel per day adjustment for March) and then Iraq (110,000 barrels per day),” Ashford added.

“The unwinding of the April 2023 and November 2023 tranches and associated compensation plans has added a layer of complexity to the market, albeit one that has allowed OPEC+ to remain agile in reacting to market conditions,” the energy research head continued.

Ashford outlined in the report that Standard Chartered expects the next OPEC+ meeting “could see instructions for OPEC+ producers to fully unwind these positions if possible, adding supply to a market that is desperately looking for alternative sources”.

“Whether any producers are actually able to achieve this in the near term remains to be seen,” Ashford said, adding that “the messaging to the market is perhaps more critical”.

“OPEC (even with Iran as a founder and existing member) will respond to market supply conditions in the most effective way it can, given the logistical constraints around its exports,” Ashford went on to state.

Rigzone has contacted OPEC for comment on the Standard Chartered report. At the time of writing, OPEC has not responded to Rigzone.

A statement posted on OPEC’s website on March 1 revealed that Saudi Arabia, Russia, Iraq, the United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria, and Oman had decided to boost production by 206,000 barrels per day in April. According to this statement, the eight OPEC+ countries are next scheduled to meet on April 5.

A statement posted on OPEC’s website on February 1 revealed that the eight countries had “reaffirmed their decision on 2 November 2025 to pause production increments in March 2026 due to seasonality”. 

In a statement posted on OPEC’s site on March 4, the OPEC Secretariat announced that it had received updated compensation plans from Iraq, the United Arab Emirates, Kazakhstan, and Oman.

A table accompanying this statement outlined that the plans amounted to a total of 727,000 barrels per day in February, 756,000 barrels per day in March, 793,000 barrels per day in April, 818,000 barrels per day in May, and 850,000 barrels per day in June.

According to the table, Kazakhstan’s compensation plans amount to 602,000 barrels per day in February, 619,000 barrels per day in March, 650,000 barrels per day in April, 669,000 barrels per day in May, and 700,000 barrels per day in June. Iraq’s compensation plans come in at 110,000 barrels per day in both February and March, 95,000 barrels per day in April, and 90,000 barrels per day in both May and June.

The UAE’s compensation plans amount to 10,000 barrels per day in February, 20,000 barrels per day in March, 40,000 barrels per day in April, 50,000 barrels per day in May, and 51,000 barrels per day in June, according to the table, which showed that Oman’s compensation plans come in at 5,000 barrels per day in February, 7,000 barrels per day in March, 8,000 barrels per day in April, and 9,000 barrels in both May and June.

To contact the author, email andreas.exarheas@rigzone.com