OPEC+ members moved to extend their voluntary production cuts through the second quarter of 2024, agreeing to keep 2.2 million barrels of oil per day off the market in a bid to keep crude prices stable.
"These voluntary cuts are calculated from the 2024 required production level as per the 35th OPEC Ministerial Meeting held on June 4, 2023, and are in addition to the voluntary cuts previously announced in April 2023 and later extended until the end of 2024," a press release which appeared on OPEC's website on Sunday said.
Leading commitments to cut were Saudi Arabia (1 million bpd), Russia (471,000 bpd, in addition to 500,000 bpd announced in April 2023 and extended to December 2024), Iraq (220,000 bpd), the UAE (163,000 bpd), Kuwait (135,000 bpd), Kazakhstan (82,000 bpd), Algeria (51,000 bpd) and Oman (42,000 bpd).
"Afterwards, in order to support market stability, these voluntary cuts will be returned gradually subject to market conditions," OPEC said.
Russian Deputy Prime Minister Alexander Novak confirmed that Russia would reduce oil output and exports by 471,000 bpd between April and June, "in coordination with certain OPEC+ member countries."
"The reduction will affect crude oil production and exports as follows: in April, the production cut will be 350,000 barrels per day and exports cut [will amount to] 121,000 barrels per day. In May, the reduction in production will amount to 400,000 barrels per day, and in exports to 71,000 barrels per day. In June, the production cut will amount to 471,000 barrels per day," Novak said.
The official Saudi Press Agency confirmed Riyadh's commitment to the cuts, with a source from the Kingdom's Energy Ministry saying oil production will hit about 9 million barrels per day through June.
The OPEC+ decision comes amid falling global demand for oil, notwithstanding the ongoing European security crisis, Houthi attacks targeting Israeli, British and American commercial ships in the Red Sea, and an ongoing Israeli assault in Gaza, signalling that the global crises are having limited impact on demand, as countries around the world hit a major slump. Europe in particular is facing the threat of widespread deindustrialization thanks to Brussels' shortsighted energy policy vis-a-vis Moscow, with hundreds of major energy-intensive industries making the move to the US to enjoy lower energy costs and generous subsidies from the US federal government.
In January, Saudi Arabia suspended plans to increase crude output from 12 million to 13 million barrels per day by the year 2027, citing Riyadh's ambitious green transition plans.
WTI and Brent crude prices have risen by roughly 8 and 6 percent, respectively, since OPEC+ first announced its planned cuts in late November, with the benchmarks trading in the $79.97 and $83.55 range as of Sunday.