OPEC+ Members Commit To Extended Voluntary Oil Production Cuts Through November 2024

The OPEC+ nations, including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman, held a virtual meeting on September 5th, 2024. They reiterated their commitment to adhering to voluntary production adjustments announced earlier in April and November 2023. The group stressed the importance of full compliance with these adjustments.

In August 2024, Saudi Arabia, Russia, the UAE, Kuwait, Algeria, and Oman conducted two ministerial discussions with Iraq and Kazakhstan. Both countries were urged to achieve full conformity and compensate for overproduced volumes since January 2024. Iraq and Kazakhstan committed to engage with secondary sources to outline their plans for production adjustments to achieve compliance.

Iraq and Kazakhstan have been overproducing since January 2024 but reaffirmed their dedication to the agreement during the OPEC Secretary General’s visits in late August. These visits were coordinated with Saudi Arabia's Minister of Energy and the Chairman of the OPEC and non-OPEC Ministerial Meetings. Workshops organized by the OPEC Secretariat allowed both countries to detail immediate measures for achieving full conformity.

During these workshops, Iraq and Kazakhstan provided extensive details on measures such as advancing field maintenance plans and reducing production. They also delayed or canceled spot sales for August. These actions were part of their strategy to meet compensation schedules submitted to the OPEC Secretariat on August 22nd.

The eight participating countries agreed to extend their additional voluntary production cuts of 2.2 million barrels per day until the end of November 2024. Starting December 1st, 2024, these cuts will be gradually phased out monthly according to an attached schedule. There is flexibility to pause or reverse adjustments if necessary.

Future Plans

Iraq and Kazakhstan reinforced their commitment during discussions in August 2024. They pledged to work closely with secondary sources to ensure compliance with production adjustments. Their compensation schedules aim for full conformity by September 2025.

The overproducing countries reconfirmed that they would fully compensate for any excess volumes by September 2025. This commitment was emphasized during the virtual meeting held on September 5th, where all eight member countries expressed their resolve.

The collective efforts of these nations highlight a strong commitment towards stabilizing oil markets through coordinated production adjustments. The extended cuts demonstrate a unified approach in managing global oil supply effectively.

With inputs from SPA