Uche Cecil Izuora
The Organization of Petroleum Exporting Countries (OPEC), is trying to establish a mechanism for setting baselines for its 2027 oil production, an information from the Organization showed on Wednesday.
However, OPEC+ sources said that separate talks could agree a further accelerated oil output hike for July.
On Wednesday, the 22-member group tasked OPEC headquarters with developing a mechanism to assess countries’ maximum production capacity, to be used as reference for 2027 output baselines for all countries, OPEC+ said in a statement.
The group, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, has been discussing new baselines – production levels from which each member makes cuts or increases – for the last few years.
Baselines and quotas are controversial because some members such as the United Arab Emirates and Iraq have increased their production capacity, pressing the case for higher quotas, while others such as African members have seen declines. Angola quit the group in 2024 over a disagreement on its production target.
OPEC+ has agreed three layers of output cuts since 2022.
Two of these are in place until the end of 2026 and one is currently being unwound by the eight members. Wednesday’s meeting did not make any changes to output policy.
Earlier, eight OPEC+ members who are in the process of gradually raising output are set to meet and may agree an output hike for July of 411,000 barrels per day, the same as in May and June, the delegates said.
All sources declined to be identified by name due to the sensitivity of the matter.
The 2027 baselines in theory could feature in production policy when all output cuts currently in place expire.
Oil prices fell to a four-year low in April below $60 per barrel after OPEC+ said it was accelerating its output hike in May and as U.S. President Donald Trump’s tariffs raised concerns of global economic weakness. Since then it has recovered to about $65.
Earlier this month, sources told Reuters that the eight countries, in addition to an output hike for July, may unwind the remainder of the most recent cut by the end of October.