Saudi Arabia, Russia, and Some Other OPEC+ Producers to Prolong Oil Production Cuts Until June

By Jace Dela Cruz

Mar 03 2024, 22:49 PM EST

Saudi Arabia, Russia, and some other key members of the Organization of the Petroleum Exporting Countries Plus (OPEC+) have decided to prolong their voluntary crude supply cuts until June.

Led by Saudi Arabia and Russia, OPEC+, consisting of 13 OPEC members and 10 of the world's major non-OPEC oil-exporting countries, agreed on Sunday to extend voluntary oil output cuts into the second quarter.

Saudi Arabia, Russia Extend Voluntary Crude Supply Cuts

According to CNBC, the decision, announced by the state-owned Saudi Press Agency on Sunday, indicates that Saudi Arabia will maintain its voluntary reduction of one million barrels per day until the end of June. This move aims to support oil prices and stabilize the market amid ongoing uncertainties.

Russia is also cutting its production and export supplies by a combined 471,000 barrels per day until the end of the second quarter. This decision follows a previous pledge by Russia to reduce supplies by 500,000 barrels per day in the first quarter.

Other OPEC+ producers, including Iraq and the UAE, are also extending their voluntary production cuts. Iraq plans to maintain a reduction of 220,000 barrels per day, while the UAE will continue its cut of 163,000 barrels per day.

Voluntary Cuts of OPEC+ Countries

These voluntary cuts were separated from the formal policy of OPEC+ countries made in November to collectively reduce output by two million barrels per day until the end of 2024.

Several OPEC+ members, including Saudi Arabia and Russia, have separately announced the trimming of their supplies by a total of 2.2 million barrels per day until the end of the first quarter of 2024.

The decision to extend the supply cuts comes amid a languishing oil price, which has relatively twitched narrowly between $75 and $85 per barrel since the beginning of the year.

Despite efforts to stabilize the market, factors such as attacks on commercial vessels in the Red Sea shipping routes and geopolitical tensions continue to pose challenges.