11/30/2023–|Last updated: 12/1/202301:07 PM (Mecca time)
Saudi Arabia, Kuwait, Algeria, the UAE, Iraq and the Sultanate of Oman announced a voluntary reduction in oil production following an OPEC Plus meeting held on Thursday.
Yesterday, the Saudi News Agency (SPA) quoted a source in the Ministry of Energy as saying that the Kingdom will extend its voluntary production reduction by one million barrels per day until the end of next March.
The same source said that this decision came in coordination with some countries participating in the OPEC Plus alliance agreement, which held a meeting on Thursday.
He stated that this reduction is in addition to the voluntary reduction of 500,000 barrels per day, which the Kingdom previously announced last April, and which extends until the end of December 2024.
The source confirmed that this additional voluntary reduction comes to strengthen the precautionary efforts made by the OPEC Plus countries with the aim of supporting the stability and balance of oil markets.
SPA reported that Saudi Arabia’s oil production will reach about 9 million barrels per day until the end of March 2024, and added, “In support of market stability, these additional reduction amounts will be restored gradually according to market conditions.”
During that meeting, OPEC Plus producers agreed to voluntary reductions in production approaching two million barrels per day for early next year, and each country announced the amount of the voluntary reduction.
The OPEC Plus alliance, which consists of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, held this meeting online to discuss production levels for 2024, amid fears that the market is facing a potential surplus.
The OPEC Plus group – which pumps about 40% of the world’s oil – said that the latest agreement will include reductions approaching two million barrels per day.
Russia announced on the same day that it would strengthen its voluntary reduction in oil production to 500,000 barrels per day, and extend it until the end of the first quarter of 2024.
Moscow had previously pledged to reduce exports by 300,000 barrels per day until the end of this year.
The production of this group – amounting to about 43 million barrels per day – actually reflects reductions of about 5 million barrels per day aimed at supporting prices and achieving market stability.
Earlier, one of the delegates said that the additional “OPEC Plus” cuts for the first quarter of 2024 are scheduled to be voluntary, and an informed source stated that each country will separately announce its voluntary reduction, according to what Reuters reported.
Kuwait
For its part, Kuwait News Agency (KUNA) quoted Oil Minister Saad Al-Barrak as saying on Thursday that his country will voluntarily reduce oil production by 135,000 barrels per day for 3 months, starting from the first of next January.
Al-Barrak added that Kuwait’s oil production will reach 2.413 million barrels per day until the end of March 2024.
KUNA quoted the minister as saying that the reduction aims to make the markets stable, and that it will be in addition to a voluntary reduction of 128 thousand barrels per day announced last April.
Algeria
A statement by the Ministry of Energy on Thursday showed that Algeria plans to voluntarily reduce its oil production by 51,000 barrels per day for the first quarter of 2024, bringing its oil production target to 908,000 barrels per day.
The new reduction comes in addition to another voluntary reduction of 48,000 barrels per day announced by Algeria last April, which is scheduled to end by the end of 2024.
The UAE
The UAE also announced that it will voluntarily reduce its oil production by 163,000 barrels per day, starting from January until the end of March next year.
The Emirates News Agency (WAM) reported that this decision came in coordination with some countries participating in the OPEC Plus agreement.
Abu Dhabi added – in a statement – that its oil production will become 2.912 million barrels per day, until the end of next March, after which – and in support of market stability – these additional reduction amounts will be gradually restored, according to market conditions.
She indicated that this voluntary reduction comes in addition to the voluntary reduction of 144 thousand barrels per day, which was previously announced by the UAE last April and will continue until the end of December 2024.
Iraq
The Iraqi News Agency reported, on Thursday, that Iraq will voluntarily reduce oil production by 220,000 barrels per day in the first quarter of 2024.
The agency said that the country’s production will reach 4.009 million barrels per day for the period from the first of January until the end of next March.
She added that the additional reductions will gradually return after next March, depending on the market situation.
Oman
The Sultanate announced that it will make an additional voluntary reduction of 42 thousand barrels per day of crude oil, starting next January until the end of March 2024, in coordination with some countries participating in the “OPEC Plus” agreement, according to what was reported by the Oman News Agency.
The Ministry of Energy and Minerals explained that this additional reduction is in addition to the previous voluntary reduction of 40,000 barrels per day, which continues until December 2024.
She indicated that additional reduced quantities will be restored gradually according to market conditions.
