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Sun. Jun 23rd, 2024

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have agreed to extend voluntary production cuts amounting to 2.2 million barrels per day until the end of 2025.

OPEC announced in a press release on Sunday that the next ministerial meeting of OPEC+ is scheduled for December 1. Additionally, the Joint Ministerial Monitoring Committee (JMMC) will meet every two months to monitor production.

The coalition, which includes OPEC and allies led by Russia, has implemented significant production cuts since late 2022. Currently, the total cuts by OPEC+ members amount to 5.86 million barrels per day, roughly 5.7% of global demand.

These cuts include 3.66 million barrels per day from OPEC+ members until the end of 2024, with voluntary reductions of 2.2 million barrels per day by some members set to end in June.

According to the statement, a new production target for the UAE has been approved, increasing to 3.519 million barrels per day in 2025 from the current 2.9 million barrels per day. This increase will be phased in gradually from January to the end of September 2025. The overall oil production level for participating countries will rise from January 1 to December 31, 2025, with OPEC+ expected to produce 39.725 million barrels per day, including the new UAE production level.

The OPEC statement emphasized the ongoing commitment of OPEC and non-OPEC members to achieving and maintaining oil market stability and providing long-term market transparency. This approach, characterized by caution, proactivity, and pre-emptiveness, has been consistently adopted by member countries.

The statement also highlighted the critical importance of full conformity and the compensation mechanism, with an extension of the assessment period by three independent sources until the end of November 2025 to serve as a reference for 2026 production levels.

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