OPEC+ extends oil production cuts until December 2025 to stabilize the market, maintaining the cap at 39.72 million barrels per day.
The OPEC+ alliance, led by Saudi Arabia and Russia, decided to extend until December 31, 2025 the strong cuts in its oil supply, equivalent to almost 6% of global crude oil demand, which were agreed since the end of 2022 to stabilize barrel prices.
This decision was made at the semi-annual conference of the sector ministers of the 22 countries that make up the alliance, held in a hybrid format in Riyadh.
The extension of the “joint level of production” until the end of 2025 aims to “achieve and maintain a stable oil market” and provide “long-term guidance and transparency for the market.” This agreement extends for one more year the binding cuts that were due to expire at the end of 2024, with some upward adjustments in the quotas of several partners after reassessing their productive capacity.
The joint production ceiling is set at 39.72 million barrels per day (mbd), not including the voluntary cuts of eight countries: Saudi Arabia, Russia, Iraq, Kazakhstan, United Arab Emirates, Kuwait, Oman and Algeria. OPEC members Venezuela, Iran and Libya are exempt from these commitments due to involuntary cuts in their oil activities caused by sanctions, crises and conflicts.
The period of validity of the reductions set today exceeds the expectations of the markets, where oil prices closed last Friday lower with the largest monthly losses of the year. With this decision, OPEC and its allies maintain their approach of being “cautious, proactive and preventive.”
The next OPEC+ ministerial conference has been called for December 1, 2024.
