The move by the OPEC+ leaders is aimed at rebalancing the market
Saudi Arabia and Russia announced on Wednesday the extension of their voluntary oil output and export cuts until the end of the year, as tightening supply and rising demand drive oil prices up.
The two countries, which are the leaders of the OPEC+ group of major oil producers, made announcements in separate official statements hours before a ministerial monitoring panel of the group was due to convene online.
Riyadh said it would continue to cut its crude output by 1 million barrels per day (bpd). Production for November and December will amount to approximately 9 million bpd, the Saudi Ministry of Energy said in a statement.
“This voluntary cut decision will be reviewed next month to consider deepening the cut or increasing production,” the ministry said.
At the same time, Russian Deputy Prime Minister Aleksandr Novak reaffirmed that Moscow would continue to curb its oil exports by 300,000 bpd until the end of the year, on top of earlier cuts made with fellow OPEC+ nations. He added that Russia will review the decision next month after analyzing the market.
“Next month a market analysis will be carried out in order to make a decision on whether to deepen the reduction or to increase oil production. This is in addition to the voluntary reduction previously announced by Russia in April 2023, which will last until the end of December 2024,” Novak explained.
Russia has already pledged to curb production of crude by some 500,000 bpd, or nearly 5% of its output, from March until the end of this year.
OPEC+, which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, agreed last October to cut its output by about 2% of world demand from last November until the end of 2023. The group later agreed to extend the curbs to the end of 2024 in an effort to balance out the market.
Global oil prices have risen significantly since Russia and Saudi Arabia announced supply cuts in early July, with Brent crude surging from around $76 per barrel to nearly $89 currently.
