Oil alliance OPEC+ zeroes in on group compliance after postponing output hike

The OPEC+ alliance is once more cracking down on group compliance with oil output cuts, as it presses ahead with a three-pronged plan of formal and voluntary production trims. 

Two OPEC+ delegates, who could only comment anonymously because of the sensitivity of the talks, told CNBC that the coalition has sharpened its focus on the conformity of its members with their output pledges, amid repeat overproduction from heavyweight members such as Iraq and Kazakhstan.

Russia, whose barrels are sanctioned in the West and transported with lower visibility across a shadow fleet, has also at times exceeded its assigned quota under the alliance's formal policy, one of the sources said.

Eight OPEC+ members, including kingpin Saudi Arabia, were due to begin returning 2.2 million barrels per day of voluntary cuts to the market starting in October. Earlier this month, they postponed this phaseout to start in December instead. OPEC+ nations are operating two other production declines: under official policy, they will produce a combined 39.725 million bpd next year. The same aforementioned eight members are separately curbing their output by another 1.7 million bpd throughout 2025, also on a voluntary basis.

Undercompliance has been a repeat bane of the OPEC+ alliance, casting a shadow over the credibility of its intentions to cut output – at a time of market uncertainty exacerbated by war in the hydrocarbon-rich Middle East, recent stock sell-offs and a fragile post-Covid recovery in the world's top crude importer, China.

Oil prices have remained subdued for the better part of the year and dropped sharply on Thursday, following a Financial Times report stating that OPEC+ de facto leader Saudi Arabia was prepared to suffer through a