OPEC will not limit production at the June meeting

Sources close to OPEC+ reported that the cartel and its allies probably will not impose more large-scale production restrictions at the meeting scheduled for June 4, despite the decline in prices to $70 per barrel. 

Against the background of the deteriorating prospects for the global economy, some OPEC+ countries decided in April to introduce additional production restrictions, which will be in effect from May until the end of the year. Today, OPEC+ accounts for approximately 40% of world oil production and 60% of world exports, so any serious decisions of the alliance can have a significant impact on oil prices.

At the beginning of October last year, the cartel decided to reduce production by 2 million barrels per day compared to the level of August 2022. Now the total reduction in OPEC+ production is 3.66 million barrels per day. At the same time, the total oil production today is below the target level due to limited production capacities in Nigeria and Angola (production in these countries in total is 600 thousand barrels/day below the established quotas).

In addition, last month Iraq's production was 220 thousand barrels per day below the target level due to supply disruptions from Iraqi Kurdistan.

Thanks to the April OPEC+ decision on additional production restrictions, Brent oil prices jumped by about $9 and exceeded $87 per barrel. However, today Brent quotes are located near the area of $74 per barrel.