OPEC+ production discipline weakened in May, with overall compliance falling to 87%, down from 94% in April. Iraq overproduced its quota by 210,000 b/d and Kazakhstan by 150,000 b/d, according to secondary sources cited by the IEA. The overproduction added 360,000 b/d to global supply at a time of softening demand.
The 2.2 mb/d of additional voluntary cuts — set to begin unwinding in September 2026 — create further downside risk. If OPEC+ moves ahead with the scheduled production increase, the market could face a 500,000–800,000 b/d surplus in Q4 2026.
Saudi Arabia has signaled it will not bear the burden of compensating for overproducers indefinitely. Energy Minister Prince Abdulaziz bin Salman warned in an OPEC+ press statement that "the group has tools to enforce discipline," hinting at potential emergency meetings.
The WTI price response to OPEC+ announcements has diminished. The market is increasingly focused on demand-side signals rather than supply management. The deteriorating manufacturing PMI data outweighed any OPEC+ posturing.
OPEC+ discipline is cracking at exactly the wrong time — when demand is slowing. The $70/bbl level is critical: if it breaks, the next floor is $65/bbl (2025 average). Do not enter long-term fixed-price contracts above $74. Use collars to cap upside risk while protecting against a further decline.