OPEC+ Starts Voluntarily Cutting Oil Production: Report
TEHRAN (Tasnim) – Several OPEC+ countries, including Saudi Arabia and Russia, have begun voluntarily reducing their oil output by an aggregate additional volume of 2.2 million barrels per day (bpd) in January.
The policy will be in force throughout the first quarter of 2024 (January-March) and, depending on market conditions, the oil producers’ cartel may begin progressively returning reduced volumes to the market.
Following the November 30 OPEC+ summit, the member countries of the cartel decided on additional voluntary cuts in oil output to achieve a balance in the global market, according to TASS.
Thus, Saudi Arabia will reduce output by one million barrels of oil per day (bpd) until the end of March 2024, while Russia will deepen its reduction in oil deliveries to world markets from 300,000 bpd to 500,000 bpd.
Other OPEC+ countries will lower production by a total of nearly 700,000 bpd, including Iraq (by 223,000 bpd), the United Arab Emirates (UAE) (by 163,000 bpd), Kuwait (by 135,000 bpd), Kazakhstan (by 82,000 bpd), Algeria (by 51,000 bpd) and Oman (by 42,000 bpd). These cuts are not part of the OPEC+ agreement and remain optional, the report added.
Given that Saudi Arabia is extending production cuts already in effect since July 2023 and is not deepening them, and that Russia is cutting its already reduced supply volumes by another 200,000 bpd, the volume of new cuts for the market will reach only 896,000 bpd.