OIL: OPEC 2025 Production Baseline Review Likely in Focus After June Meeting

OPEC+ production cuts are due to expire in December and new targets are needed for 2025 but the group will also need to discuss and agree to new production baselines, according to Energy Intelligence.

• The UAE and Iraq are seeking upward revisions with both claiming or targeting a production capacity well above their existing output caps of 4mb/d and 2.91mb/d, respectively.
• Adnoc has recently announced increased production capacity up to 4.85mb/d and targets 5mb/d for 2027.
• Algeria also seems to be positioning for a modest uptick in capacity.
• The OPEC+ meeting in November was delayed as Nigeria and Angola objected to a proposal to lower their baselines which led to Angola's exit from the group over the matter.
• Future cuts can have a greater impact on supply if baselines are more closely aligned to real production capacity. Three consultancies have been commissioned to independently review member production capacity by end-June.
• The June 1 meeting is however likely to sidestep this issue with focus on the possible unwinding some of the cuts beyond Q2.