OPEC+ Production Pact Faces Compliance Hurdles as Iraq Shows Evasion Risk
New agreements among OPEC and its allies to restrict oil output are encountering friction, with several participants failing to fully adhere to the terms. The latest Bloomberg report highlights that Iraq has not kept within its assigned limits, casting doubt on the collective effectiveness of the pact.
According to the group’s own data, Baghdad surpassed its February quota by roughly 200,000 barrels per day (b/d).
In February, the second month of the updated OPEC+ framework, Iraq cut production by only 14,000 b/d, arriving at about 4.2 million b/d. The formal limit for the country was set at around 4.0 million b/d. In January, the deviation was similarly around 200,000 b/d. While Saudi Arabia, the United Arab Emirates, Kuwait, and Algeria appear to be meeting their obligations in full, the broader discipline required to sustain the agreement remains weak, largely because of Iraq’s actions.
Energy Minister Hayyan Abdul Ghani of Iraq asserted last week that the country was operating within a 4 million b/d quota, promising that any deviations would be offset by additional cuts. The minister’s remarks reflect the ongoing tension between stated targets and real-world output adjustments.
Other members of the expanded OPEC+ coalition are also grappling with compliance. Tanker-tracking data indicates Russia, which received special terms to reduce both production and exports, is running into difficulties implementing the agreed restrictions. Shipments by sea have risen to their highest levels in a year, complicating the alliance’s ability to rein in supply. This development was noted in a prior edition as well.
Looking ahead, OPEC+ ministers are scheduled to reconvene in early April to reassess market conditions. A broader gathering at the alliance’s headquarters in Vienna is planned for early June to review the trajectory of supply, demand, and policy alignment across member countries.
Separately, there have been indications of shifts in energy supply chains beyond crude oil. Earlier in the year, Russian coal shipments to Asia showed a marked decrease, a development that adds another layer to the global energy balance and the strategic calculations of consuming nations and producers alike.