OPEC+’s aggressive efforts to enforce oil production quotas have backfired, triggering a sharp decline in crude prices as tensions with Kazakhstan threaten to escalate into a broader price war.
Crude futures plunged nearly 3% to around $62 a barrel on Wednesday after Kazakhstan, the group’s biggest quota violator, refused to curb its output. Energy Minister Erlan Akkenzhenov asserted that Kazakhstan would prioritize national interests over OPEC+ obligations, signaling limited capacity to make deeper production cuts.
The rift has heightened fears among analysts that internal divisions within OPEC+ could flood the global oil market with excess supply, worsening an already bearish outlook. Reuters reported that several member countries are now pushing for a significant production hike in June to punish non-compliant nations.
Kazakhstan’s Energy Ministry later issued a statement reaffirming its commitment to OPEC+ targets and promising to seek “mutually acceptable solutions,” but the attempt at damage control failed to stabilize markets.
The Organization of the Petroleum Exporting Countries and its partners will convene via video conference on May 5 to decide production levels for June. While the default plan calls for a modest monthly increase of 138,000 barrels per day, a larger hike of 411,000 barrels per day is now under consideration — a move that would signal deepening divisions within the group.
“Kazakhstan’s position makes the May meeting a critical event,” said Helima Croft, head of commodities strategy at RBC, adding that the situation mirrors past disputes like Angola’s 2023 departure from OPEC following quota conflicts.
Kazakhstan’s major oil projects, such as Chevron’s Tengiz field, are operated by foreign companies, limiting the government’s direct control over production levels. This structural challenge, combined with rising tensions inside OPEC+, raises questions about the group’s ability to maintain cohesion in the face of growing internal strains.
As the May 5 meeting approaches, the oil market will be watching closely for signs of either reconciliation — or an all-out production battle.