Kazakhstan’s Oil Output Jumps 2%, Crude Oil Futures Slide Over 0.7%

Key Moments:

Strained Compliance with OPEC+ Limits

Kazakhstan raised its crude oil production by 2% in May, against demands by the OPEC+ alliance for the country to curb its output. According to an industry source, Kazakhstan’s average production between May 1st and May 19th was 1.86 million barrels per day, up from April’s 1.82 million bpd. Tengiz, Kazakhstan’s largest oil field, contributed 932,000 bpd to that total. This stands in contrast to the 3% output drop Kazakhstan reported in April.

OPEC+ Pressures and Strategic Resistance

The Organization of the Petroleum Exporting Countries (OPEC+) has been pushing for stricter compliance with production curbs. The group has accelerated output increases to apply additional downward pressure on global oil prices and impose indirect consequences on members exceeding quotas.

While OPEC+ raised Kazakhstan’s May production quota slightly to 1.486 million bpd, up from 1.473 million bpd in April, the country still surpassed its allowed limits. Kazakhstan has cited challenges in persuading Western partners like ExxonMobil and Chevron to scale back output. Such international majors operate several key projects in the country, limiting local authorities’ control over output adjustments.

Oil Price Developments

Meanwhile, oil prices fell amid uncertainty surrounding geopolitical developments. West Texas Intermediate futures declined by 0.77% to $61.66 per barrel, while Brent crude contracts dropped by 0.73% to $65.06 per barrel. Market sentiment remains cautious as investors await breakthroughs in US-Iran nuclear negotiations and the ongoing Russia-Ukraine conflict.