Members of the OPEC+ alliance have recently agreed to extend their additional voluntary production cuts of 2.2 million barrels per day for two months until the end of November 2024. In a statement, the alliance said that starting December 1, these cuts will be gradually phased out on a monthly basis with the flexibility to pause or reverse the adjustments as necessary.
The move comes as oil prices have been falling on concerns about a weak global economy and soft data from China, the world’s biggest oil importer. Last week, the Organization of the Petroleum Exporting Countries and allies were ready to proceed with a 180,000 barrels-per-day output increase in October, part of a plan to gradually raise output again.
Overall, OPEC+ is cutting output by 5.86 million barrels per day, about 5.7 percent of global demand, in a bid to support the market amid demand concerns and rising supply outside the alliance.
In June, OPEC+ agreed to extend 3.66 million barrels per day of those cuts until the end of 2025. It also agreed to prolong the most recent cuts (a 2.2 million bpd cut by eight members) by three months until the end of September 2024 and to then gradually ease this cut from October to September 2025.
Read: Oil prices rise as OPEC+ members agree to extend voluntary production cuts
Amid recent market developments, the OPEC+ members, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, held a meeting, during which they emphasized their collective resolve to ensure full compliance with the voluntary production adjustments.
The group includes Iraq and Kazakhstan, who have overproduced since January 2024 but have strongly reaffirmed their commitment to the agreement and to their compensation schedules.
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