On Tuesday, according to foreign media reports, OPEC+ reopened a heated debate on the ability of member states to produce oil, raising concerns about the further breakdown of unity in the alliance. The US and Burma have plummeted in the intraday market when they heard the news, and have now largely recovered all of the declines caused by the news.

For OPEC, understanding how much oil member countries can actually extract is a difficult issue. This issue poses a risk to the Union's efforts to stabilize the oil market.

Last year, after intense debate on this issue (which eventually led to Angola's “retreat”), OPEC, led by Saudi Arabia, commissioned an external consultant to evaluate the production capacity of its member countries. The assessment will be completed by the end of June. Several major member states are seeking to increase their crude oil production with a view to obtaining the right to extract more crude oil in 2025.

According to people familiar with the matter, the potential to increase production next year in countries such as the United Arab Emirates, Kazakhstan, Iraq, Kuwait, and Algeria is being assessed. People familiar with the matter said that some of the oil-producing countries requested an increase in production and had difficult negotiations with external consultants responsible for evaluating the matter.

OPEC+ has been limiting oil production to avoid market oversupply and support crude oil prices. J.P. Morgan warned that the alliance already has quite a bit of idle production capacity, which may make it difficult to manage the market next year, as demand growth will slow and supply will rise.

Despite this, outsiders generally expect that OPEC+ will announce the extension of current production cuts until the second half of the year at a meeting to be held on June 1. UBS Group said the alliance may also use this meeting to discuss capacity assessments.

It is unclear whether the ongoing debate will influence the decisions of the conference as in the past.

The grievance has been raged for

The UAE has long been at the heart of the production capacity issue, and its conflict with Saudi Arabia over this issue three years ago almost broke up the 22-nation alliance. But Saudi Arabia often urges OPEC+ members to be cautious when increasing production to the market.

According to people familiar with the matter, this time, the UAE is once again demanding an increase in production. State-owned oil giant Abu Dhabi National Petroleum said on its website earlier this month that it can produce 4.85 million barrels per day, which is nearly one-third higher than OPEC's last assessment of its production capacity.

James Swanston (James Swanston), Middle East and North Africa economist at KITU Macro, said, “The UAE is very eager to increase production as soon as possible, and it can be said that it is also more adaptable to low oil prices. The old wounds between the UAE and the rest of the coalition are likely to be unraveled again.”

According to Interfax, Kazakhstan has also applied to OPEC+ to increase oil production in 2025. In Kazakhstan, a major development project for the Tengiz oil field led by Chevron will be completed in the second quarter of next year. The expansion is expected to cost US$48.5 billion and will increase the field's daily production by 260,000 barrels.

Iraq has also publicly stated that it is capable of producing more oil than OPEC production limits. Iraqi oil minister Hayan Abdul Ghani said last weekend that Iraq has voluntarily cut oil production by a sufficient amount and does not agree to support the extension of production reduction measures at the upcoming meeting. “Iraq can currently produce more than 5.5 million barrels of crude oil every day,” he said in an interview. In comparison, OPEC's last assessment was 4.8 million barrels.

Like Kazakhstan, Iraq has been violating production quotas this year. Iraq's daily oil production is close to 4.2 million barrels, which is about 200,000 barrels above the agreed limit.

The capacity assessment was carried out by three energy consulting firms that OPEC often collaborates with: S&P Global's IHS Markit, Wood Mackenzie Ltd., and Rystad Energy. The three companies are in discussions with various member states and are being asked to submit assessment reports to the OPEC secretariat in Vienna this week.

In some ways, their evaluations can be described as academic. Due to insufficient investment and disrupted operations, many OPEC+ countries are currently unable to produce oil at their stated capacity levels.

For example, although Iraq claims to have greater production potential, hundreds of thousands of barrels of oil production capacity have been cut off every day since an export pipeline stopped operating due to a dispute with neighboring Turkey at the beginning of last year.

However, discussions have become quite intense, as countries are eager to ensure that production reaches the highest possible target level next year, and their oil extraction capacity may improve at that time, according to those involved in the negotiations.

Meanwhile, internal discord within OPEC+ may also affect crude oil prices. Under the influence of mixed factors such as strong fuel demand, concerns about the Middle East conflict, unstable economic prospects, and sufficient US crude oil production, the price of US oil is currently hovering around 78 US dollars per barrel.