The OPEC+ nations, led by Russia and Saudi Arabia, have agreed to extend the current voluntary cuts in oil output for a further three months in an attempt to raise prices. These have remained low due to ongoing geopolitical disputes in Europe and the Middle East.
According to the official news agency of Saudi Arabia, the Kingdom will continue its three-month voluntary cutback of one million barrels per day, which has been in place since July 2023 recorded by The Times.
This is on top of the output cutbacks of 500,000 barrels per day that were already decided in April 2023.
Every member of OPEC+ has individually announced its decrease. The deputy president of Russia, Alexander Novak, disclosed that, in accordance with certain OPEC+ nations, Russia plans to reduce its oil production and exports by an additional 471,000 barrels per day for the second quarter of 2024.
Kuwait declared that “It will cut its oil output by 135,000 barrels per day until June. In a same vein, Oman will reduce its output by 42,000 bpd and Algeria will reduce its by 51,000 bpd.”
The decision by OPEC+ to let countries choose their own production cutbacks is a result of similar actions taken in December by OPEC, which caused Angola to leave the oil cartel by reducing the output quota for its African members. Nigeria’s daily output limit was cut from 1.78 million barrels to 1.5 million barrels, much below the production baseline set under the 2024 budget.
The most recent production cutbacks are a part of a series of output reductions by OPEC+ members that were started in 2022 with the intention of supporting prices in the face of rising US supply and weak demand worldwide.
They have lowered the members’ total output targets by almost 2.2 million barrels per day since the start of the most recent voluntary cutbacks in January.
Prices for Brent and West Texas Intermediate crude oil have risen by 6% and almost 8% respectively, since the announcement of the current reduction at the end of November.
But despite the continued hostilities in the Middle East, which include the war between Israel, Hamas and the Houthi attacks on commercial ships, oil prices have not yet reached the $100 per barrel level that was last seen in the summer of 2022.
