OPEC+ Plans New Production Capacity Framework, 2027 Quota Battle Officially Begins!

OPEC+ representatives will gather in Vienna this week.A preliminary discussion was held on the program for updating the estimation of member countries' production capacity.

This alliance, consisting of 22 countries, plans to establish a new production baseline based on the capacity assessment results.Set production targets for the year 2027.。

According to informed sources, at the meeting scheduled for September 18-19, delegates hope to reach a consensus on a mechanism for assessing the maximum sustainable crude oil production capacity of each member country.The Secretariat aims to submit a feasible proposal to OPEC+ ministers by the end of the year.

According to data from the International Energy Agency (IEA), the maximum sustainable production capacity of OPEC+ plus Mexico is 47.9 million barrels per day. Based on average data from third-party agencies such as Argus, the alliance's crude oil output in August increased by 509,000 barrels per day month-on-month, reaching 42.4 million barrels per day.

OPEC+ originally planned to implement the new production baseline in 2025.However, due to internal disagreements regarding the evaluation process (including independent assessments from Rystad, Wood Mackenzie, and IHS), this plan has been postponed to 2026 and then to 2027.

Even if OPEC+ reaches an agreement on a new framework for production capacity assessment, implementing it will still face challenges.Iraq, Nigeria, and other member countries have requested an increase in their baseline production levels, but it remains unclear whether these demands reflect actual capacity growth. Angola, due to its 2024 production target being lower than expected, withdrew from OPEC in that year.

Recently, as the eight core member countries gradually lift large-scale production cuts, the idle capacity of OPEC+ has become the focus of the market. Due to upstream and midstream facility constraints,It is uncertain whether countries like Russia and Iraq can return to pre-production reduction levels in the coming months.

Since April, OPEC has been steadily increasing output, fully reversing the first cut of 2.5 million barrels per day by September, which accounts for about 2.4% of global demand. The latest production policy for October continues this trend by lifting the second batch of production cuts, ahead of schedule by more than a year. However, actual production growth often falls short of targets, as most member countries are operating near their production capacity limits.

Compliance issues have further complicated the situation. Countries like Kazakhstan, Iraq, and the UAE have already exceeded their quotas, prompting Saudi Arabia to advocate for stricter adherence to regulations. OPEC emphasized in its statement that member countries should fully comply with the Declaration of Cooperation and compensate for the overproduction since January 2024, aiming to restore discipline within the alliance.