Russia, Iraq, Kazakhstan continue to exceed OPEC+ oil production limits

(Bloomberg) – Key OPEC+ nations Iraq, Kazakhstan and Russia continue to pump above production limits intended to shore up global oil prices, the group’s data showed.

While Russia made a noticeable cutback in June, the three countries are still collectively supplying several hundred thousand barrels a day above quotas set at the start of the year, according to a monthly report from OPEC.

Supply curbs by OPEC+ — spearheaded by group leader Saudi Arabia — have helped balance crude markets against a flood of new barrels from the U.S. and other parts of the Americas this year. Brent futures are trading near $84 a barrel in London.

That might still be a little too low for OPEC+ members including the Saudis, who need prices closer to $100 a barrel, the International Monetary Fund estimates. The failings of Riyadh’s counterparts in the group poses a further headwind for crude, which has dropped more than $2 this week.

The data published by OPEC’s Vienna-based secretariat on Wednesday show that three of the coalition’s biggest members still haven’t conformed to their oil production targets, let alone begun additional compensatory cuts they promised to make up for earlier cheating.

Russia, which jointly leads OPEC+ with the Saudis, curbed production by 114,000 bpd to 9.139 MMbpd last month, according to the report. That’s still 161,000 above its designated quota. President Vladimir Putin is seeking revenue to continue waging war against Ukraine. 

Iraq also made slight reduction, by 25,000 bpd to 4.189 MMbpd, but it remained 189,000 bpd above its limit. Baghdad has often chafed against OPEC+ constraints while it seeks revenue to rebuild a war-shattered economy.

Last month, OPEC+ outlined plans to start gradually restoring halted supplies from the fourth quarter, only to stress that the plans are provisional after prices swooned. The group will hold a monitoring meeting on Aug. 1.