Emmanuel OchayiIn a move aimed at fortifying oil market equilibrium, the Organisation of Petroleum Exporting Countries (OPEC) and its allies announced on Thursday an additional reduction of 1 million barrels per day in monthly oil output, set to commence in 2024.
Revealed during the 36th OPEC and non-OPEC ministerial meeting, this announcement reinforces the commitment of the oil cartel to support market balance.
“The voluntary cuts set to begin in 2024 are a strategic step towards nurturing stability within oil markets,” a statement from the OPEC Secretariat emphasized.
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Highlighting the specifics, the oil cartel outlined the contributing OPEC+ nations engaging in these supplementary cuts: Saudi Arabia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman. These reductions, effective from January to March 2024, intend to restore stability to the market, contingent upon market conditions.
The Russian Federation also affirmed its commitment, announcing a cut of 500 thousand barrels per day for the same period, sourced from average export levels of May and June 2023, comprising 300 thousand barrels per day of crude oil and 200 thousand barrels per day of refined products.
Moreover, OPEC, following assessments by independent sources, established the projected production levels for Angola, Congo, and Nigeria in 2024. These evaluations suggest Angola can achieve 1.11 million barrels per day, Congo 277,000 barrels per day, and Nigeria a production level of 1.5 million barrels per day in 2024.
This latest decision follows a series of moves by OPEC and its allies to stabilize the oil market. Last year, amid pressures from various quarters including the United States, OPEC+ had agreed to a 2 million barrels per day cut in output, the deepest since the 2020 COVID pandemic.
The trajectory of these cuts continued in April with a voluntary reduction of 1.66 million barrels per day announced by OPEC.
Subsequently, in June, this reduction was extended until 2024, aligning with the commitment of OPEC and non-OPEC participating countries in the Declaration of Cooperation (DoC) to ensure a stable oil market and provide sustained guidance.
The decision to further curtail output arrives following the OPEC+ Joint Ministerial Monitoring Committee’s decision to maintain the group’s output policy unchanged earlier in October.
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