OPEC+ Surprises With Oversized Output Hike
The decision reflects short-term bullish fundamentals: inventories are low, refining margins are strong, and U.S. refiners are processing the most crude for this time of year since 2019. Still, it signals a major pivot from price defense to volume maximization. In a quote to Bloomberg, Onyx Capital's Harry Tchilinguirian noted that "It was pointless to keep a notional voluntary cut in place,' said . 'Better to get it over with and move on.'
But while Saudi Arabia pushes discipline, Kazakhstan is going its own way.
In June, Kazakhstan's crude output surged 7.5% to 1.88 million bpd—well above its official OPEC+ quota of 1.5 million bpd. This matched its all-time production high, largely driven by Chevron's expansion of the Tengiz mega-field, which alone added 140,000 bpd month-over-month. Kazakhstan's total oil and condensate production hit 2.15 million bpd in June, up from 2.02 million in May.
Despite repeated pledges of OPEC+ compliance, Kazakh authorities admit they can't enforce production cuts on foreign-led projects like Tengiz or Kashagan. 'The republic has no right to enforce production cuts,' Energy Minister Yerlan Akkenzhenov said in May. Chevron, for its part, has stated bluntly that it doesn't 'engage in discussions about OPEC or OPEC+.'
Meanwhile, oil prices remain under pressure. Brent futures are down more than 6% year-to-date, and analysts estimate that global inventories have been climbing at 1 million bpd in the first half of 2025, amid cooling demand in China and production increases in non-OPEC countries. Analysts at JPMorgan and Goldman Sachs earlier this year warned prices could dip below $60 in Q4.
OPEC+ is betting that strong summer demand will soak up the new supply. But as Kazakhstan pumps freely and Saudi Arabia chases volume, the group's cohesion faces growing uncertainty.
By Tom Kool for Oilprice.com
More Top Reads From Oilprice.com:Read this article on OilPrice.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Miami Herald
an hour ago
- Miami Herald
Sanctions, currency collapse fan fear of hyperinflation surge in Venezuela
Venezuela is spiraling once more into an inflationary storm as new data warns that price increases could skyrocket to 530% in 2025, fueled by a collapsing currency, oil export disruptions and mounting political and economic isolation. After two years of relative calm and moderate economic stabilization, inflation has returned with a vengeance. According to Bank of America Global Research, monthly inflation hit 26% in May, up from 18% in April—marking the fastest pace in years and triggering fears of a return to full-blown hyperinflation. 'Fears of hyperinflation have returned,' said Sebastián Rondeau, an economist at Bank of America. 'The deterioration in price stability is severe and accelerating.' The sharp surge in inflation follows a perfect storm of structural vulnerabilities and renewed external pressures, most notably the reimposition of U.S. sanctions on Venezuela's oil industry earlier this year and a concurrent fall in oil production. Venezuela's annual inflation reached 229% in April, up dramatically from a year-over-year average of 94% in 2024. If current trends persist, Bank of America projects an inflation rate of 530% for 2025 — potentially Venezuela's worst economic year since the infamous hyperinflation cycle of 2017–2019. Much of the inflationary pressure stems from Venezuela's crippled oil sector, one of the country's key lifelines for foreign currency and government revenue. Bank of America and Bloomberg report that oil production fell to 870,000 barrels per day in April, down from 980,000 in March—a drop that analysts say is directly tied to the U.S. decision to let key operating licenses for American and international companies expire. In late May, the Trump administration declined to renew the license that had allowed Chevron and several European firms to operate in Venezuela under sanctions waivers. As a result, Chevron was forced to halt the export of nearly five million barrels of oil, a significant loss for the cash-strapped socialist regime. To make matters worse, other foreign oil operators such as ENI and Maurel & Prom also had their licenses suspended. These policy shifts have led to a sharp decline in oil shipments and a loss of crucial hard currency inflows. Adding fuel to the fire, President Donald Trump announced in March that his administration would impose a 25% tariff on countries importing Venezuelan oil and a 15% tariff on direct imports from Venezuela. The sanctions and oil export cuts have placed enormous pressure on the already weakened bolívar, which has been depreciating at an average of 13% per month this year. That rapid decline follows a brief period of currency stability in 2024, during which the Caracas regime tried to maintain a controlled exchange rate using Central Bank interventions and limited dollar reserves. But those reserves have all but dried up. With declining oil exports, the government is struggling to get foreign currency and is once again resorting to monetary financing—printing bolívars to cover spending gaps. As a result, prices for basic goods have soared. A kilogram of beef now sells for $7 to $8 on the black market, compared to $4 just a few months ago. Public workers are reporting real wage declines of over 70% since the start of the year, and strikes are spreading among healthcare workers, teachers and pensioners. Failing to stop the economic firestorm, the socialist regime has turned its sights on those who dare to publicize the collapse. In recent weeks, authorities have detained economists, analysts and digital platform operators who publish independent financial data, intensifying a campaign of repression aimed at concealing Venezuela's worsening economic crisis. The arrests followed the publication of alarming inflation data by the independent Venezuelan Finance Observatory, which reported an annualized inflation rate of 229% as of May. The Central Bank of Venezuela, controlled by Maduro loyalists, stopped releasing official inflation figures in October 2024, when prices began surging again. 'The government wants to eliminate the parallel market without supplying enough dollars — and that's impossible,' said exiled economist José Guerra, who heads the observatory. 'They're trying to control inflation while printing money without backing. Monetary liquidity increased 250% through May alone. That inevitably fuels more inflation.' The government's sweeping effort to silence dissent has also extended to popular platforms like Monitor Dólar, which published unofficial exchange rates crucial for businesses and consumers in a country plagued by currency instability. The site stopped updating on May 27. Soon after, authorities detained around 20 people linked to the platform. The cryptocurrency exchange El Dorado — often used as a benchmark for Monitor Dólar — also shut down operations in Venezuela following the arrests. Now, many informal currency exchanges are being routed through platforms like Binance in an effort to avoid digital surveillance and government crackdowns. With the cost in bolivars of buying a U.S. dollar more than doubling since January, the regime has responded not with economic reform, but with political persecution.
Yahoo
2 hours ago
- Yahoo
OPEC+ lifts oil output: What investors need to know
Oil prices (CL=F, BZ=F) are in focus after OPEC+ boosted oil output to 548,000 barrels a day, compared to the 411,000 barrels a day in the three months prior. Yahoo Finance Senior Reporter Ines Ferré outlines the latest. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. Oil prices reversing earlier losses amid strong demand and a tight market, even as investors consider the impact of OPEC+ hiking oil output more than expected in August. Yahoo Finances' Ines Ferre has the details on all of this. Good morning, Ines. Good morning, Julie, and OPEC+ deciding to increase oil production by 548,000 barrels per day. That is more than what the street had been expecting. Remember that the street was expecting 411,000 barrels per day, which is what they did in May, June and July. And by the way, for September, Wall Street is now expecting that OPEC+ will increase production again as they unwind these production cuts that they have had over the last couple of years. Oil today is trading a little bit higher, part of this has to do with the fact that the street is saying, "Look, there is still robust demand for oil." So you have global inventories that are low, which is something that OPEC+ had cited when they made this decision. And also of course, you've got the tariff delay to August 1st, that is bullish for oil, and especially if it gets delayed again. Longer term, though, you do have Wall Street that is expecting oil prices to go down on this increased supply. Goldman Sachs is expecting that by the end of the year, you are going to see Brent coming down to $59 per barrel. Right now Brent is trading around 68 per barrel, so that is quite a fall. And for next year, you also have Wall Street that is expecting oil prices to go even lower. Part of the main part of this has to do with OPEC+ is now regaining market share, and they are doing this by increasing production. Ines, thank you very much. We'll check back in with you later. Thank you. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 hours ago
- Yahoo
Chevron and Exxon Lead $34B US-Indonesia Energy and Trade Pact
The U.S.-based Chevron Corporation CVX and Exxon Mobil Corporation XOM are set to sign a $34 billion memorandum of understanding (MoU) with Indonesia, which will deepen the economic and strategic ties between the two countries. The deal, involving U.S. energy giants ExxonMobil and Chevron alongside Indonesia's state-run Pertamina, marks a robust step toward enhanced cooperation across energy, agriculture and infrastructure sectors. The MoU, expected to be signed on the same day during business hours, reflects both countries' intent to build long-term partnerships that go beyond traditional trade. According to Indonesia's senior officials, this collaboration is geared not only toward expanding investment but also advancing technology transfer and energy resilience. At the heart of the agreement lies a significant commitment to energy collaboration. ExxonMobil, with more than 125 years of presence in Indonesia, continues to deepen its roots by boosting oil output from Cepu block, adding 30,000 barrels per day (bpd) and bringing total output to 180,000 bpd, which now contributes to 25% of Indonesia's national oil production. Chevron, currently carrying a Zacks Rank #3 (Hold), too, is expected to play a major role in facilitating technology exchange and future exploration activities. This focus on energy aligns with Indonesia's push for self-sufficiency and sustainability in energy, while providing America's firms a strategic foothold in Southeast Asia, an increasingly vital region amid global supply-chain realignments. In addition to energy, the MoU spans agriculture, with Indonesia agreeing to import major U.S. commodities such as soybeans, corn and cotton. This aspect of the agreement reinforces food security for Indonesia and provides U.S. farmers a reliable export destination amid rising global trade uncertainties. With agricultural exports often tied to broader geopolitical dynamics, this pact sends a clear signal of mutual commitment and stability in trade relations. Beyond economics, the $34 billion deal signals America's strategic intent to bolster engagement with Southeast Asia, a region central to Indo-Pacific stability. The agreement comes just as the United States prepares to impose new tariffs at the end of a 90-day moratorium, underlining the importance of securing reliable, cooperative trade partners like Indonesia. As terms of the MoU remain under wraps, the scale and diversity of the agreement suggest a long-term agenda of commercial growth balanced with strategic alignment, a formula likely to shape the U.S.-Indonesia relationship for years to come. Investors interested in the energy sector might look at some better-ranked stocks like BKV Corporation BKV andFlotek Industries, Inc. FTK. Both BKV and Flotek currently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today's Zacks #1 Rank stocks here. BKV Corporation is an energy company that produces natural gas from its owned and operated upstream businesses. The Zacks Consensus Estimate for BKV's 2025 earnings indicates 338.18% year-over-year growth. In the oil and gas sector, Flotek serves major and independent energy producers and oilfield service companies, both domestic and international. The Zacks Consensus Estimate for FTK's 2025 earnings indicates 64.71% year-over-year growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report Flotek Industries, Inc. (FTK) : Free Stock Analysis Report BKV Corporation (BKV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
