In a significant move, Saudi Arabia, Russia, and several key OPEC+ producers have agreed to extend their voluntary crude supply cuts until the conclusion of the second quarter. The OPEC+ coalition, led by Riyadh and Moscow, will continue to implement measures aimed at stabilizing oil markets.
According to the state-owned Saudi Press Agency, Saudi Arabia will prolong its voluntary crude production cut of 1 million barrels per day until the end of June, maintaining a daily production of approximately 9 million barrels.
Russia, in coordination with OPEC+, will reduce its production and export supplies by a combined 471,000 barrels per day until the same period, as confirmed by Russian Deputy Prime Minister Alexander Novak. This follows Moscow’s initial commitment to a slightly higher cut of 500,000 barrels per day in the first quarter.
Iraq and the UAE, other key OPEC members, will also extend their voluntary production cuts. Iraq will continue its cuts of 220,000 barrels per day, and the UAE will maintain a reduction of 163,000 barrels per day until the end of the second quarter.
Notably, OPEC+ countries, including Saudi Arabia and Russia, had previously announced voluntary cuts totaling 2.2 million barrels per day until the end of the first quarter, separate from the formal policy of collectively reducing output by 2 million barrels per day until the end of 2024.
The decision to extend the production cuts comes amid a persistent oil price range of $75 to $85 per barrel throughout the year. Various factors, including OPEC+ supply cuts, maritime attacks in the Red Sea by Houthi rebels, and ongoing geopolitical tensions, have influenced the oil market dynamics.
Unlike formal policy changes, voluntary cuts do not require unanimous consent during official meetings, and they serve to complement existing OPEC+ trims. The group’s next policy negotiations are scheduled for June, where assessments of production capacity baselines will play a crucial role in determining future output limits.
Saudi-controlled oil giant Aramco’s surprising decision in late January to suspend plans for increasing crude production capacity, citing concerns related to the green transition, adds an additional layer of complexity to the evolving dynamics within the global oil industry.
