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OPEC Says Output Hike Tempered By Compensation From Quota Cheats
- OPEC and its allies accelerated their planned output increase to penalize members that exceeded production limits with lower prices.
- Key OPEC+ nations added less oil to the market last month than the planned output increase, with eight members compensating for earlier over-production.
- Saudi Arabia drove the push for the output increase to reclaim market share lost during supply curbs.
- Oil prices initially weakened due to the output increase but surged after recent Israeli attacks on Iran's energy infrastructure.
- OPEC Secretary General stated no immediate action is needed as Iran's crude exports remain unaffected by the attacks.
- A report revealed mixed enforcement of agreed production increases, with Saudi Arabia, Kazakhstan, and Iraq making adjustments in May.
- Saudi Arabia raised production by 177,000 barrels a day in May, while Kazakhstan and Iraq reduced output as compensation for cheating.
- Production in the 22-nation alliance increased by 180,000 barrels a day in May to 41.23 million per day.
- OPEC+ will meet in July to consider further output increases, with Riyadh aiming for significant hikes to regain market share quickly.
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