Oman is expected to support a cautious, phased approach to future oil production increases as OPEC+ prepares for a key meeting that could reshape production quotas and baseline calculations for all member countries, according to Ali al Riyami, a well-known Omani energy analyst.
Speaking to Al Arabiya Business, Al Riyami said the producer alliance has now implemented production increases for the sixth consecutive month, adding around 188,000 barrels per day (bpd) each month as part of the gradual unwinding of voluntary supply cuts.
He noted that OPEC+ has effectively completed the restoration of around 1.065 million bpd of previously withheld production, leaving approximately 2 million bpd of voluntary cuts yet to be returned to the market.
“I believe this is now the sixth consecutive increase in production by OPEC+, with each increase amounting to around 188,000 barrels per day,” Al Riyami, a former high-level official of the Ministry of Energy and Minerals, said. “This means the tranche of about 1.065 million barrels per day has now largely been completed, while another tranche of roughly two million barrels per day remains.”
According to Al Riyami, attention is now shifting to an important OPEC+ meeting expected in the coming months, where member countries will review the group’s production quota framework and the baseline production levels used to determine each country’s output allocation.
He said the meeting is likely to be pivotal because member states are expected to negotiate a revised methodology for calculating production quotas across the alliance.
Ali al Riyami, Omani energy analyst
“Based on what we have learned from various sources, the upcoming meeting will review the quota mechanism and agree on a new method for calculating quotas and baseline production levels for all OPEC+ countries,” he said.
Given the significance of those discussions, Al Riyami expects OPEC+ to temporarily pause further production increases until agreement is reached.
“I expect there will be a hold for a certain period until an agreement is reached,” he said. “After that, the remaining two million barrels per day could begin to be gradually restored.”
Al Riyami also believes there is a direct connection between the timing of restoring the remaining voluntary cuts and the resolution of longstanding disagreements over production baselines.
“There is naturally a linkage between restoring the remaining two million barrels and resolving the baseline issue,” he said.
While Iraq has publicly sought a higher production baseline, Al Riyami said it is not alone. Before its withdrawal from OPEC+, the United Arab Emirates had also argued for revisions, while Kazakhstan is among other countries seeking adjustments.
“Iraq has raised many observations, and before its withdrawal the UAE had also sought changes. Kazakhstan is another country that wants its baseline reviewed,” he said.
According to Al Riyami, OPEC+ commissioned a study around two years ago to evaluate possible revisions to production baselines, and he believes that work is now nearing completion despite continuing geopolitical tensions in the region.
“If members agree to maintain production at current levels for a period while the quota issue is resolved, I believe the study is essentially ready,” he said.
He expects broad agreement on revised baseline production levels for the alliance’s 21 or 22 participating countries to be reached within the next three to four months, before the end of the year.
Such an outcome, he suggested, would provide the foundation for OPEC+ to proceed with the next phase of restoring the remaining voluntary production cuts in an orderly and coordinated manner.
