Following a virtual meeting on November 30 (local time), OPEC+ oil producers agreed to cut production by approximately 2.2 million barrels per day (bpd) by early 2024, as Saudi Arabia and Russia continue to implement their current voluntary production cuts.
OPEC+ will continue to cut oil production from 2024. (Photo: Getty Images)
OPEC+ currently supplies more than 40% of global oil production, at 43 million barrels a day. This output reflects cuts of approximately 5 million barrels per day in an effort to support prices and stabilize the market this year.
This latest reduction of 2.2 million barrels per day was decided by eight crude oil producers in the bloc, with Saudi Arabia and Russia deciding to extend their previous voluntary cuts of 1.3 million barrels per day.
For the additional reduction of 900,000 barrels per day, Russia further reduced its production by 200,000 barrels per day. The remainder was divided among the other six OPEC+ members.
Russian Deputy Prime Minister Alexander Novak said that Russia is voluntarily cutting back on crude oil and petroleum products.
The UAE agreed to cut production by an additional 163,000 barrels per day, while Iraq said it would cut production by an additional 220,000 barrels per day in the first quarter of 2024.
Saudi Arabia, Russia, the UAE, Iraq, Kuwait, Kazakhstan, and Algeria also announced that the cuts would be gradually lifted after the first quarter of 2024 if market conditions permit.
OPEC+ is focusing on production cuts amid a nearly 20% drop in oil prices since the end of September due to concerns about weaker economic growth in 2024, as well as expectations of a supply surplus.
The International Energy Agency (IEA) forecasts that oil demand growth in 2024 will slow as the final phase of the post-pandemic economic recovery ends, along with the development of electric vehicles and several other factors.
Hoa Vu (Source: Reuters)
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