By: Tom Pawlicki, Senior Specialist, Market Intelligence
OPEC+ announced on Sunday that it planned to maintain production at current levels and also updated the so-called compensation cuts. Keeping track of what the cartel says and then actually does is a difficult task, and the supposed compensation cuts have no real enforcement.
OPEC was formed in 1960 and the composition of its membership has changed over the years, understandably so. Some countries left after having trouble maintaining production, such as Indonesia in 2009 when it became a net oil importer. Angola was the most recent departure in 2024, with the country unable to keep up with its production targets. Angola regularly produced 300,000-450,000 bpd below its allocated amount. OPEC+ started in 2016 as an informal organization with countries that wanted to maintain control over their oil production but didn’t want to formally join or pay membership fees to a bureaucratic organization.
It's becoming a mess, however, as there are 12 members in the original OPEC, but only nine of them are subject to production targets. The creation of OPEC+ includes the 12 formal members but adds 10 additional members. Only three of those 10 members (Russia, Oman and Kazakhstan) are subject to production quotas, while Nigeria, Congo, Gabon, and Equatorial Guinea are dropped from OPEC-9 to form the OPEC-8 group, which is a subset within OPEC+ that has production targets. Production and quota figures get muddied further as OPEC does not formally publish member quotas, and its production values for Russia/Oman/Kazakhstan differ from those published by the IEA or EIA.
Using quotas for the five formal members reported by Reuters and combined with quotas from the three OPEC+ members reported by the IEA shows a combined quota for OPEC-8 of 33.15 mln bpd for December 2025. Since the cartel said that it would maintain quotas through Q1 2026, that number should also be the current quota. Production by those OPEC-8 members was 32.8 mln bpd in December. Russia was responsible for the uptick in December in the following chart, as the IEA said its output rose to 9.56 mln bpd from 9.0 mln bpd in November. OPEC’s figures for Russia in December differ and actually show a decline to 9.304 mln bpd from 9.377 mln bpd previously.
The OPEC-9 group produced 22.98 mln bpd in December when its quota was 23.354 mln bpd. It has been under-producing its quota regularly since August last year.
An additional layer of complication is added by the so-called compensation cuts. In the last two years, Kazakhstan, Iraq, Russia, Oman and UAE have all over-produced their allotted volumes at one time or another. They attempted to make up for it by cutting production by an equal amount, and only Kazakhstan and Iraq have compensation cuts in place now. The quota shown above in the blue line includes those cuts. The compensation cuts for the two countries total 643,000 bpd in January, meaning that the quota would be that much higher in the chart above.
Iraq has mostly complied with its compensation cuts, which were intended to average 133,000 bpd in 2025. Its actual cuts were nearly identical, averaging 132,000 bpd in 2025. Kazakhstan has rarely complied with its cuts, however. Its production target in 2025 was 1.45 mln bpd but its actual output averaged 1.76 mln bpd. Tables showing its compensation cuts continually show cuts being pushed back in time and grow in amount. They are essentially useless. In March 2025, it targeted production at 67,000 bpd below its quota as compensation. One month later, the compensation number was raised to 117,000 bpd. By November 2025, it projected 355,000 bpd in cuts through June 2026, with most of them back-end loaded. In the update yesterday, it promised to make 581,000 bpd in cuts through June 2026. It is an ever-increasing number that it is unlikely to meet.
OPEC-8 under-produced its quota by 350,000 bpd in December which would normally be a bullish indication. Kazakhstan’s output slipped 200,000 bpd to 1.50 mln bpd in December from 1.70 mln bpd in November due to the damage to SPM-3 at the CPC loading terminal and damage to inland production areas. However, the chronic over-production is likely to continue due to the ramp-up of Chevron’s joint venture projects in the Tengiz oilfield. As the compensation cuts have continued to grow, so too have the excuses from the country’s energy minister, who said that the country is taking all possible efforts to comply with its production target. Kazakhstan’s production can easily rebound back up toward 1.8-1.9 mln bpd in coming months, which would be a significant 350,000-450,000 bpd above its 1.45 mln bpd quota. That would become a large bearish factor for oil markets and appears as the next likely development for OPEC+.
OPEC has been in existence for 66 years now, but the changing composition of members, mismatches in production quotas and lack of adherence to compensation cuts is likely to diminish the impact of OPEC+ in coming years. It is mostly an organization led by Saudi Arabia and Russia that fights back against US shale and other large non-OPEC players rather than the stabilizing force that it intends to be. It’s monthly meetings and production targets are worth following, but interpreting their data will become increasingly difficult.
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