ALBAWABA - In a coordinated attempt to stabilize oil prices, eight OPEC+ countries, including Saudi Arabia, Russia, and the United Arab Emirates, announced that their voluntary oil production restrictions of 2.2 million barrels per day (bpd) will be extended until the end of December 2024.
The decision, made public on Sunday, shows the cautious position that the organization has taken in light of the lower demand from key nations like China and the United States, in addition to increased supply from sources that are not members of OPEC+, according to AFP.
Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman were supposed to progressively raise production in December as part of a phased reversal of cutbacks, AFP reports. However, due to poor economic signals and low demand, the coalition decided to delay any further supply for another month and restricted output to boost pricing.
The prices of oil have been under prolonged pressure and OPEC+ has been facing it. Despite Brent crude currently trading at roughly $73 per barrel, marking a slight recovery, prices are still quite near to their yearly lows, with Brent crude falling below $69 as recent as September, according to Reuters.
OPEC+ has reiterated that its choices are dictated by market fundamentals rather than having exact price benchmarks in mind, with the 180,000 bpd increase initially planned for December representing a small component of the total 5.86 million bpd held back by the coalition, roughly 5.7% of global demand.
As part of its long-term plan to balance the market, OPEC+ has agreed to continue cuts of 3.66 million barrels per day until the end of 2025. In order to maintain stability in the face of a challenging economic climate, the coalition will take into account any new market developments and possible modifications as it gets ready for its December 1 meeting to debate 2025 plans.
