OPEC+ Extends Oil Production Cuts by One Month
OPEC+ has decided to extend the voluntary production cuts since November 2023 by 2.2 million barrels per day until the end of December 2024.
OPEC+ oil alliance extends production restrictions by a month, maintaining 2.2 million barrels per day cuts since November 2023 until December's end. / Picture: © Wikimedia Commons / DALIBRI / CC BY-SA (https://creativecommons.org/licenses/by-sa/3.0)
The OPEC Secretariat in Vienna announced this. The countries involved in this measure are Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman. The eight countries had already introduced the cuts in April and November 2023 as part of additional voluntary adjustments to stabilize the global oil market and are now reaffirming their commitment to comply with and follow through on the agreements.
The decision comes when oil prices have been under pressure since the summer of 2024. US crude oil WTI fell below 70 dollars per barrel at times last week, while North Sea Brent crude was quoted just above this level. This price trend reflects falling global demand, which is being weighed down in particular by the economic slowdown in Europe and China. The decline in economic activity in these regions has dampened demand for crude oil and further depressed prices. At the same time, however, concerns about possible escalations in the Middle East have recently led to a slight stabilization of prices.
In addition to extending the production cuts, the OPEC+ members reaffirmed their intention to strictly control production volumes. The countries concerned have committed to fully implementing the agreement on voluntary production cuts and balancing out their overproduction since January 2024. This offsetting is to take place by September 2025 and will be continuously monitored by the Joint Ministerial Monitoring Committee (JMMC) to ensure compliance with the measures. In particular, Iraq, Russia, and Kazakhstan confirmed in recent statements their plans to offset the overproduction volumes according to the agreed timelines.
OPEC+ has strengthened its role as a global regulator for the oil market in recent years and is showing its determination to counteract price fluctuations and stabilize the markets with the current extension. Analysts see the voluntary cuts as an important measure to give the market stability and support prices in the face of weaker demand in Europe and China. However, the future of oil prices remains fragile given uncertain geopolitical developments and economic uncertainties.