OPEC+ announced on Thursday that it will extend its voluntary oil production cuts of 2.2 million barrels per day (bpd) through March 2025 to maintain market stability. The decision was made during a virtual meeting held alongside the 38th OPEC and non-OPEC Ministerial Meeting.
Key Highlights:
- Extended Cuts: The alliance, which includes Saudi Arabia and Russia, will phase out the 2.2 million bpd cuts gradually between April 2025 and September 2026, with the option to adjust based on market conditions.
- Commitment to Compliance: Overproducing members pledged to submit updated compensation plans to address excess production volumes since January 2024.
- UAE Output Adjustment: The UAE will begin increasing its output by 300,000 bpd from April 2025, delaying its original January 2025 timeline.
Broader Impact:
Currently, OPEC+ is holding back 5.86 million bpd, or about 5.7% of global demand. Despite these efforts, Brent crude prices have largely remained between $70 and $80 per barrel in 2024, with recent trades around $72.
This decision underscores the alliance’s commitment to stabilizing oil markets amidst price fluctuations and global demand uncertainties.