Last week, OPEC published a new compensation plan to offset the previous overproduction, Commerzbank's commodity analyst Carsten Fritsch notes.

OPEC announces new compensation cuts through 2026

"According to the plan, production cuts totalling 4.57 million barrels per day are planned for the eight affected countries until mid-2026. Iraq accounts for 1.93 million barrels per day and Kazakhstan for 1.3 million barrels per day. Other notable contributions come from Russia (691 thousand barrels per day) and the United Arab Emirates (386 thousand barrels per day)."

"Even though the aforementioned cuts will not apply over the entire period, but will add up, the increase in supply from May is likely to be less than the announced 411 thousand barrels per day. Compensatory cuts totalling 378 thousand barrels per day will apply from May."

"If these were implemented in full, OPEC+ production would therefore only increase by a good 30 thousand barrels per day. In June, OPEC+ production would even fall slightly if there is no further increase in the agreed production volume."