OPEC+ agrees to crude oil output cut of 2 mbpd

OPEC+ decided to make an additional cut of 1 mbpd, which will take the cumulative reduction in production to 2 mbpd for early next year
Crude oil
Crude oil Energy Watch

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.

OPEC+ focused on lower crude oil output

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."

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The OPEC+ meet coincides with the opening of the United Nations' COP-28 climate summit in Dubai.

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