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Kazakhstan Faces Pressure to Cut Oil Output After Saudi Warning

Kazakhstan is exploring ways to meet its OPEC+ production cut commitments after a fresh push from Saudi Arabia to rein in member nations exceeding agreed output levels.

“Kazakhstan always was and is committed to the OPEC+ agreement,” the country’s Energy Ministry said in an emailed statement on Tuesday.

“We are considering all possible options for meeting our commitments.”The response comes just days after Saudi Arabia, OPEC+’s de facto leader, delivered a strong message at the May 3 meeting, warning that countries ignoring quotas could face further group-wide output increases in retaliation.

Kazakhstan has been the largest over-producer in recent months. Despite higher output, the country’s oil fund revenues dropped 43% year-on-year by April’s end, due to falling crude prices, according to a research note by Halyk Finance.

The investment bank also warned that if oil prices remain low, Kazakhstan may be forced to draw more from its national oil fund this fall to cover government spending.

As part of the new OPEC+ agreement, Kazakhstan pledged to cut production to 1.5 million barrels per day (bpd) in June, down from 1.85 million bpd in March.

The Energy Ministry has not yet outlined how it will implement this reduction.Adding to the uncertainty, the ministry noted that the $48.5 billion expansion of Chevron-led Tengiz oil field is expected to be fully operational this quarter, a development that could further impact Kazakhstan’s production volumes.

Meanwhile, Russia, another major OPEC+ player, is reportedly reviewing its budget framework to cope with declining oil revenues.

As pressure mounts within OPEC+ for tighter compliance, Kazakhstan must balance its production ambitions with the coalition’s collective effort to stabilize oil prices.