OPEC+ members have agreed to extend oil production cuts of 2.2 million barrels per day (bpd) to the end of June 2024, as part of an effort to support market stability, the organisational announced in a public statement.
Saudi Arabia, the UAE, Iraq, Kuwait, Kazakhstan, Algeria and Oman have been revealed as the nations that will implement the cuts, alongside Russia.
These voluntary cuts are calculated from the 2024 required production level set during the OPEC Ministerial Meeting held on June 4, 2023. They will be in addition to the voluntary cuts previously announced in April 2023 and later extended until the end of 2024.
“Afterwards, in order to support market stability, these voluntary cuts will be returned gradually, subject to market conditions,” the OPEC statement said.
Saudi Arabia, the world’s biggest oil exporter said it will extend its voluntary cut of one million bpd from April to June 2024. The Kingdom’s production cap is in addition to the voluntary cut of 500,000 bpd announced in April 2023.
As a result, Saudi Arabia’s production will be about nine million bpd until mid-2024.
Meanwhile, the UAE said that its production will remain at 2.912 million bpd, extending its additional voluntary cut of 163,000 bpd, for the second quarter of 2024. This measure is in addition to the voluntary cut of 144,000 bpd previously announced by the UAE in April 2023.
Other OPEC+ countries have also announced output cuts, including Iraq (220 thousand barrels per day); Kuwait (135 thousand barrels per day); Kazakhstan (82 thousand barrels per day); Algeria (51 thousand barrels per day); and Oman (42 thousand barrels per day) for the same period.
The announcement follows the Russian Federation’s decision to implement voluntary oil production cuts of 471 thousand bpd for the same period. Russian Deputy Prime Minister Alexander Novak said that it will cut oil production and exports by an additional 471,000 bpd in the second quarter of 2024.
Of that, the country will reduce oil production by an additional 350,000 bpd while exports will be cut by 121,000 bpd in April. In May, the additional oil output cut will stand at 400,000 bpd and exports at 71,000 bpd. In June, all the additional cuts will be from oil output, Novak said.
“In order to maintain market stability, these additional cuts will be gradually restored depending on market conditions,” after the end of the second quarter, said Russia’s Deputy Prime Minister Alexander Novak.
The 22 OPEC+ nations have implemented supply cuts of more than five million bpd since the end of 2022.
Oil prices surged Friday in anticipation of the news. The US West Texas Intermediate (WTI) passed $80 for the first time since November while the North Sea Brent Crude Barrel hit a month-high $83.55.
