OPEC agrees on additional oil production cut

The Organisation of Petroleum Exporting Countries (OPEC) and its allies on Thursday agreed to cut monthly oil output by additional 1 million barrels per day starting in 2024.
OPEC disclosed this at its 36th OPEC and non-OPEC ministerial meeting, a statement released by the organisation said.
The OPEC Secretariat noted that the announcement of additional voluntary cuts is aimed at supporting the stability and balance of oil markets.
“These voluntary cuts are calculated from the 2024 required production level as per the 35th OPEC Ministerial Meeting held on June 4 2023, and are in addition to the voluntary cuts previously announced in April 2023 and later extended until the end of 2024.

“These additional voluntary cuts are announced by the following OPEC+ countries: Saudi Arabia (1,000 thousand b/d); Iraq (223 thousand b/d); United Arab Emirates (163 thousand b/d); Kuwait (135 thousand b/d); Kazakhstan (82 thousand b/d); Algeria (51 thousand b/d); and Oman (42 thousand b/d) starting 1st of January until the end of March 2024. Afterwards, in order to support market stability, these voluntary cuts will be returned gradually subject to market conditions,” the oil cartel said.
It said the above will be in addition to the announced voluntary cut by the Russian Federation of 500 thousand barrels per day for the same period (starting 1st of January until the end of March 2024), which will be made from the average export levels of May and June of 2023, and will consist of 300 thousand barrels a day of crude oil and 200 thousand barrels per day of refined products.
It noted that, following the decision of the 35th OPEC and non-OPEC Ministerial Meeting, the completion of the assessment by the three independent sources (IHS, Wood Mackenzie and Rystad Energy) for production level that can be achieved in 2024 by Angola, Congo and Nigeria is as follows: Angola at 1,110 t/bd, Congo at 277 t/bd and Nigeria at 1,500 t/bd. This implies that OPEC believes Nigeria can achieve a production level of 1.5 million barrels per day in 2024 while Angola can achieve 1.11 million barrels per day and Congo 277,000 barrels per day.
OPEC and its allies had, in October last year, 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, 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.

READ ALSO: Oil prices fall ahead of OPEC meeting

The cuts were to start in May and last through the end of the year, an official of the Saudi Ministry of Energy was quoted as saying by the Saudi state-run news agency, SPA.
The cut is in addition to the reduction announced by OPEC+ in October 2022, according to SPA.
In June, 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.
Earlier in October, the OPEC+ Joint Ministerial Monitoring Committee (JMMC), kept the group’s output policy unchanged.

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