OPEC+ extends cuts of oil production amid global economic concerns
(MENAFN) During its recent meeting, the OPEC+ alliance decided to prolong the majority of its oil production cuts until 2024, with a gradual easing planned for 2025. This decision comes amidst concerns over sluggish global demand growth, rising interest rates, and an uptick in American oil production.
Current oil prices, hovering around USD80 per barrel, fall below the thresholds needed by many OPEC+ members to balance their budgets. Contributing to this is the apprehension surrounding China, the largest importer of crude, where fears of tepid demand growth persist.
Comprising OPEC and allied nations led by Russia, the OPEC+ coalition has implemented significant production cuts since late 2022. Presently, these cuts amount to 5.86 million barrels per day, roughly 5.7 percent of global demand.
Included in these reductions are the baseline cut of two million barrels per day from all OPEC+ member states, alongside voluntary cuts. The initial round, announced in April 2023, saw nine member states trimming production by 1.66 million barrels per day. Subsequently, a second round, disclosed in November 2023, involved eight member states reducing output by 2.2 million barrels per day.
As per the latest coalition statement, the primary production cuts, along with the initial round of reductions, will be extended through 2025, a year longer than previously planned. This move reflects the coalition's commitment to stabilizing the oil market amidst prevailing economic uncertainties.
MENAFN03062024000045015682ID1108288741
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.