The Organization of the Petroleum Exporting Countries and allies led by Russia has agreed to extend most of its deep oil output cuts well into 2025 in a bid to support prices.
The move comes after Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, met in Riyadh on the sidelines of the 37th OPEC and non-OPEC Ministerial Meeting (ONOMM).
The 12-member cartel and its 10 allies decided to “extend the level of overall crude oil production… starting 1 January 2025 until 31 December 2025,” a statement by the alliance said.
Brent crude oil prices have been trading near $80 per barrel in recent days, below what many OPEC+ members need to balance their budgets. Worries over slow demand growth in top oil importer China have weighed on prices alongside rising oil stocks in developed economies.
OPEC+ has made a series of deep output cuts since late 2022.
OPEC+ members are currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7 per cent of global demand.
Those include 3.66 million bpd of cuts, which were due to expire at the end of 2024, and voluntary cuts by eight members of 2.2 million bpd, expiring at the end of June 2024.
On Sunday, OPEC+ agreed to extend the cuts of 3.66 million bpd by a year until the end of 2025 and prolong the cuts of 2.2 million bpd by three months until the end of September 2024.
OPEC+ will gradually phase out the cuts of 2.2 million bpd over a year from October 2024 to September 2025.
