OPEC+ has come to an agreement to extend the reduction of oil production into 2024, following a meeting held in the first week of June 2023 to reach further output cuts.
Saudi Arabia will voluntarily implement an additional reduction as part of the deal to implement a further decline. The kingdom’s energy ministry announced that it will continue its 500,000 barrels per day (bpd) cut until the end of 2024, the state news agency reported.
Similarly, Iraq has stated that it will extend its voluntary cut of 211,000 bpd until the end of 2024.
The energy ministry of Oman has also confirmed its commitment to extend the voluntary reduction in oil production by 40,000 bpd until the end of 2024.
Although specific details regarding the overall scale of the supply cuts made by OPEC members are not available, Reuters has reported that the oil cartel has revised its oil output target for the next year by 1.4 million bpd compared to the current targets.
In a statement, OPEC announced that the next ministerial meeting involving both OPEC and non-OPEC members is scheduled for Sunday, November 26, 2023, in Vienna.
According to reports, members’ side conversations about production baselines, the basis for determining country quotas and reductions, led to a three-hour delay in the formal discussions.
Leading OPEC members, including Saudi Arabia, reportedly made an effort to persuade underperforming African countries like Nigeria and Angola to set more reasonable output targets.
However, the production cuts implemented by OPEC in recent months have not succeeded in bolstering prices.
Following Saudi Arabia’s significant supply reductions in April 2023, oil prices have experienced a decline of nearly 15%. Although prices briefly rose by USD 9 per barrel to surpass USD 87, concerns over a recession exerted pressure, causing prices to plunge. Brent prices settled at USD 76 immediately after the news was announced.