Eight OPEC+ countries extended extraordinary oil production cuts until September

Saudi Arabia, Russia and six other OPEC countries that are implementing additional voluntary oil production cuts aim to extend those cuts until the end of August and then may gradually increase them, it was announced this Sunday.

The announcement was made by the Organization of the Petroleum Exporting Countries (OPEC) in a statement reporting the results of a meeting held this Sunday in Riyadh by sector ministers from these eight countries, reports EFE.

This statement was made after the publication of the final declaration of the 37th OPEC+ (OPEC and allies) Ministerial Conference, which announced the extension of mandatory production cuts until December 31, 2025, adopted in 2022 and 2023.

The decision, which includes increasing the UAE’s production quota by 300,000 barrels per day, leaves the total production limit of 19 of the 22 alliance countries at 39.72 million barrels per day (mbd). All except Venezuela, Iran and Libya.

The restrictions do not include additional and voluntary cuts that Saudi Arabia, Russia, Iraq, Kazakhstan, the United Arab Emirates, Kuwait, Oman and Algeria have imposed since last November and which were due to expire at the end of this month.

“These countries will extend their additional voluntary cuts of 2.2 mbd announced in November 2023 until the end of September 2024. Thereafter, the 2.2 mbd reduction will be phased out monthly until the end of September 2024. table,” the statement explains.

Attached to the note is a table detailing the “very modest” monthly increase at which each country would return to the market the barrels withdrawn through voluntary cuts.

“This monthly increase may be interrupted or reversed depending on market conditions,” OPEC emphasizes.

Since October 2022, the alliance, which accounts for nearly 40% of global crude oil supply, has cut its supply by a total of 5.86 mbd, representing almost 6% of global demand, to keep crude oil prices in check.

Of this total reduction, 3.66 mbd, which expired at the end of this year, will be maintained until December 31, 2025, in accordance with the decision to extend its validity by one year, taken this Sunday at the ministerial conference.

Added to this are voluntary cuts of 2.2 million barrels per day, which will remain in place until the end of next August, with them gradually being lifted starting in September, depending on the development of global crude oil markets.