OPEC extends oil production cut

The Organisation of Petroleum Exporting Countries (OPEC) and its allies on Sunday agreed to extend its current oil output voluntary cuts until the end of 2025.

OPEC disclosed this at its 37th OPEC and non-OPEC ministerial meeting, a statement released by the organisation said.

The oil cartel said its member countries which announced additional voluntary cuts in April and November 2023 including Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman held a meeting in Riyadh.

It said the meeting was conducted to reinforce the precautionary efforts of OPEC+ countries, aiming to support the stability and balance of oil markets.

“The aforementioned countries decided, in addition to the latest decisions from the 37th ONOMM, to extend the additional voluntary cuts of 1.65 million barrels per day that were announced in April 2023, until the end of December 2025.

“Moreover, these countries will extend their additional voluntary cuts of 2.2 million barrels per day, that were announced in November 2023, until the end of September 2024 and then the 2.2 million barrels per day cut will be gradually phased out on a monthly basis until the end of September 2025 to support market stability,” the oil cartel said.

Background

OPEC and its allies had, in October 2022, agreed to cut oil output by 2 million barrels per day in November, the deepest cut by OPEC+ since the 2020 COVID pandemic.

The decision came despite pressure from the United States and others advocating that the group increase its output.

In April 2023, OPEC said it would start “a voluntary reduction” of 1.66 million barrels per day in its production of crude oil alongside other members of OPEC.

Again in June last year, OPEC said it would extend the cut until 2024.

It noted that the decision was taken in light of the continued commitment of the OPEC and non-OPEC Participating Countries in the Declaration of Cooperation (DoC) to achieve and sustain a stable oil market and to provide long-term guidance for the market.

In October last year, the OPEC+ Joint Ministerial Monitoring Committee (JMMC), kept the group’s output policy unchanged.

By November, OPEC and its allies agreed to cut monthly oil output by an additional 1 million barrels per day starting in 2024.

In March, the oil cartel announced an extension of additional voluntary cuts of 2.2 million barrels per day for the second quarter of 2024.

The OPEC Secretariat noted that the announcements of several OPEC+ countries extending additional voluntary cuts of 2.2 million barrels per day, aimed at supporting the stability and balance of oil markets.

In April, OPEC and its allies agreed to keep oil output policy unchanged until its meeting on Sunday.