New Delhi: The Organisation of the Petroleum Exporting Countries (OPEC) and the extended grouping OPEC+ decided on Thursday to make an additional cut of 1 million barrels per day (mbpd), which will take the cumulative reduction in production to 2 mbpd for early next year as Saudi Arabia has decided to extend its current voluntary cut of 1 mbpd. Saudi Arabia, Russia and other members of OPEC+, who produce more than 40 percent of the world's oil, held a virtual meeting on Thursday to discuss the crude oil output figures for 2024 amid concerns of a slump in demand.
A report published by Reuters said that Russia will cut 500,000 bpd and others will also contribute cuts.
With crude oil prices down from US $98 in September to US $84 and concerns over weaker economic growth in 2024 and the possibility of a supply surplus in the face of a slump in demand, the OPEC+ countries decided to focus on lower output.
The International Energy Agency (IEA) this month forecast a slowdown in demand in 2024 as "the last phase of the pandemic economic rebound dissipates and as advancing energy efficiency gains, expanding electric vehicle fleets and structural factors reassert themselves."
The OPEC+ meet coincides with the opening of the United Nations' COP-28 climate summit in Dubai.