In a recent development that's poised to impact the global oil market, several OPEC+ countries have agreed to substantial cuts in oil production for the first quarter of 2024.
Saudi Arabia Takes the Lead
Saudi Arabia, renowned as the world's top crude oil exporter, is spearheading this initiative.
The kingdom has extended its voluntary production cut, initially set to end in December, by an additional three months. This decision will maintain Saudi Arabia's oil production at approximately 9 million barrels per day until the end of March 2024, as reported by the state-run Saudi Press Agency.
This announcement came after Saudi officials met with other significant oil-producing nations in Vienna on Thursday.
Collaborative Efforts Across OPEC+ Nations
The voluntary production cuts announced span across several OPEC+ countries.
Russia has agreed to reduce its output by 500,000 barrels per day, followed by Iraq with a 223,000-barrel reduction. Similarly, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman have committed to cuts of 163,000, 135,000, 82,000, 51,000, and 42,000 barrels per day, respectively.
These concerted efforts underline the commitment of OPEC+ nations to stabilize the oil market. In an exciting addition to the coalition, Brazil, another significant oil producer, is set to join OPEC+ at the start of the next year.
OPEC's Official Statement and Future Outlook
During the 36th OPEC and non-OPEC Ministerial Meeting, conducted via videoconference, the group welcomed Alexandre Silveira de Oliveira, the Minister of Mines and Energy of Brazil.
Brazil's inclusion in the OPEC+ Charter of Cooperation, starting January 2024, marks a significant expansion of the group's influence. The meeting emphasized the ongoing dedication of the participating countries to ensure a stable and balanced oil market.
This commitment is in line with the Declaration of Cooperation's framework, established in December 2016 and subsequently endorsed in later meetings, including the 35th OPEC and Non-OPEC Ministerial Meeting in June 2023. Furthermore, the meeting acknowledged the completion of assessments by independent sources (IHS, Wood Mackenzie, and Rystad Energy) for production levels achievable in 2024 by Angola, Congo, and Nigeria, with projected outputs of 1,110, 277, and 1,500 barrels per day, respectively.
The next meeting, the 37th OPEC and non-OPEC Ministerial Meeting, is scheduled for June 1, 2024, in Vienna. This gathering will be crucial in shaping the future strategies of OPEC+ and its impact on the global oil market.