BP to close Australia Kwinana refinery in March: Update

Opec+ eight to speed up unwinding cuts from May: Update

Opec+ eight to speed up unwinding cuts from May: Update

Adds details throughout Dubai, 3 April (Argus) — A core group of eight Opec+ crude producers, in a surprise move, today agreed to speed up plans to gradually unwind 2.2mn b/d of production cuts by increasing their collective output target for May by 411,000 b/d — three times the rise originally planned. "In view of the continuing healthy market fundamentals and the positive market outlook… the eight participating countries will implement a production adjustment of 411,000 b/d, equivalent to three monthly increments, in May 2025," the group said. Front month Ice Brent futures fell by around $1/bl to $70.50/bl in response to the news, and slipped further to below $70/bl later before recovering slightly. The eight countries ꟷ Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan ꟷ last month decided to proceed with a plan to begin gradually unwinding the 2.2mn b/d of production cuts from April over 18 months. The original plan was to see their combined output target rise by 137,000 b/d on a monthly basis until September 2026. Although it is unclear whether the group will revert back to 137,000 b/d increments after May, this change should, theoretically, mean that the eight will return the last of the 2.2mn b/d in July 2026, rather than September. But the volume of oil that actually returns to the market each month will probably be less than the monthly target increases as all of the eight countries, bar Algeria, have past overproduction which they have committed to compensating for over the months ahead. The group said today that the decision to raise output targets by 411,000 b/d for May, versus 137,000 b/d, would also "provide an opportunity for the participating countries to accelerate their compensation". The seven countries with overproduction to compensate for submitted their updated plans to the Opec secretariat two weeks ago, outlining how they plan to deliver that compensation. It is unclear whether today's decision has rendered those plans moot, but it should allow for at least some of the countries to clear more of that they owe next month. Full implementation of the compensation cuts has become increasingly important for the group as it looks to balance market expectations with internal group dynamics. Frustration has built up among some members of the group towards the likes of Iraq and Kazakhstan which have regularly flouted their quotas. What is most surprising about the move is timing, coming the day after US President Donald Trump announced sweeping new global tariffs on a range of imports. That triggered an immediate sell-off in oil futures and stock markets over fears of deteriorating demand in an escalating trade war. But the tariff announcements did not appear to be at the forefront of Opec+ eight minds, with one delegate expressing scepticism that the Trump administration's tariffs were here to stay. The impact is unlikely to be as severe as many fear, they said. Instead, the decision primarily factored in the pick up in oil demand that typically comes with the start of the summer in the northern hemisphere. "A big part of this 411,000 b/d will go to meet that additional demand," one delegate said. Additionally, the move should also enhance internal group dynamics, given the frustration that had been building among some in the group prior to last month's decision to start the unwinding in April, while at the same time getting the thumbs up from the US president who had already called on Opec and its allies to "bring down the cost of oil," something it could only achieve by raising output. Trump has said that he will be visiting Saudi Arabia sometime in May, when the group of eight countries begins to accelerate the return of those barrels. By Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.