VIENNA: OPEC+ has announced that it will extend its voluntary oil output cuts of 2.2 million barrels per day (bpd) into the first quarter of 2025, with eight member countries continuing to comply with the agreement. The decision comes as part of efforts to stabilize the global oil market during a period of low winter demand.
According to Azeri-Press News Agency, the eight countries adhering to the cuts since early 2024 include Russia, Saudi Arabia, Algeria, Iraq, Kazakhstan, Kuwait, the United Arab Emirates, and Oman. Initially, these nations had intended to lift production restrictions starting in October 2024, with a gradual increase planned through to the end of the year. However, this timeline has been repeatedly postponed, and the latest OPEC+ ministerial meeting pushed the production hike further to the end of Q1 2025. Russian Deputy Prime Minister Alexander Novak emphasized that the group's actions are designed to prevent market destabilization during times of reduced demand.
The updated schedule published on the OPEC website outlines an anticipated production increase from April 2025 to September 2026, although this remains subject to adjustments based on market conditions. In the interim, the eight OPEC+ countries have agreed to voluntarily cut an additional 1.65 million bpd until the end of 2026.
Under the revised plan, the United Arab Emirates will be the only member affected by changes to oil production quotas in 2025. Originally slated to increase output by 300,000 bpd from January 2025, the UAE will now begin ramping up production in April 2025, with completion set for September 2026.
Some member countries, including Russia, Iraq, and Kazakhstan, did not fully meet their voluntary reduction commitments in 2024. As a result, they have agreed to compensate for the excess production starting in August, with efforts expected to continue until September 2025. The recent OPEC+ meeting extended their compensation period to June 2026, and the countries must submit updated plans to the OPEC Secretariat by the end of 2024. As of now, these plans have not been made public.
The previous schedule required Russia to offset 480,000 bpd, Kazakhstan 699,000 bpd, and Iraq 1.44 million bpd of excess production. The compliance and adjustment measures underscore OPEC+'s commitment to maintaining balance in the global oil market amid fluctuating demand and geopolitical pressures.