OPEC+ Gameplan

Real spare capacity is far lower than you think. Rip the band-aid off now.

In this article, I will expand on the OPEC+ policy I detailed in last week's OMF titled, "My Latest Thoughts On The Oil Market And Where We Are Headed."

We saw headlines today from a few OPEC sources suggesting that another truncated production increase could be proposed for the upcoming June meeting. This time, Kazakhstan is the cause, and its overproduction is causing other OPEC+ members to call for a faster increase.

As I wrote last week:

I am going to be more contrarian here and predict that OPEC+ will accelerate the production increase faster than expected throughout 2025.

This is a major viewpoint shift from my angle, and I will explain why.

There's no scenario where Russia, UAE, Kazakhstan, and Iraq will compensate for the overproduction. No scenario.

Once you are a cheater and the Saudis acknowledge it, there's no turning back. And since the Saudis are actually tracking all the right stuff now (exports and not reported production), it's obvious to them that these perennial cheaters will continue to cheat.

But as I will explain in this piece today, there's more to this than meets the eye.

OPEC+ Gameplan

Oil is stuck between a rock and a hard place today. From demand concerns over the looming tariff war and the faster-than-expected production increase from OPEC+, it's fair to assume that traders and investors feel skittish about investing in oil.

But this is where things get interesting. Reality is not aligning with perception, and this has been the case with oil for a while now.