Russia and Saudi Arabia will continue with planned voluntary oil supply cuts up to the end of 2023, officials have annouced.
By December 2023, Saudi Arabia intends to continue its voluntary reduction of one million barrels per day (b/d), keeping the nation’s output level at about nine million barrels per day.
Concurrently, Russia, in remarks made by Deputy Prime Minister Alexander Novak on November 5, reiterated its commitment to maintaining a 300,000 b/d reduction in exports of crude oil and oil products through the end of 2023.
This review will be essential in determining whether to deepen the existing cuts further or potentially increase production.
During the same period, Saudi Arabia will announce plans for January 2024, whether to maintain, deepen or roll back the voluntary cut.
The rationale behind these continued voluntary reductions is rooted in the collective efforts of OPEC countries. The overarching goal is to fortify the precautionary measures taken, aiming to support the stability and balance of oil markets.
This collective commitment underlines their concerted endeavour to maintain equilibrium and stability within the oil industry, highlighting the importance of market balance in global oil supply and demand dynamics.
The next OPEC+ ministerial meeting, scheduled for November 26, will be crucial for discussing market conditions and production quotas.
This meeting will provide further insights into how the global oil market is likely to evolve in response to these ongoing developments.
It is important to note that in its October 2023 Commodity Outlook report, the World Bank stated that concerns about the conflict in the Middle East and geopolitical risks, coupled with the OPEC+ supply contraction and rising middle-distillate demand, are anticipated to bolster prices in the final quarter of 2023.
However, these forecasts generally indicate the anticipation of limited impact from the conflict, provided it doesn’t escalate further.
The prediction also rests on the presumption that, should some OPEC+ supply curbs be lifted in early 2024, global oil output will increase both inside and outside of the organization.
