OPEC+ has decided to prolong most of its extensive oil production cuts until 2025. The group aims to bolster the market amid weak demand growth, high interest rates, and increasing competition from US producers.

OPEC+ Extends Oil Production Cuts Until 2025

Reuters reported that in recent days, Brent crude prices have lingered around $80 per barrel, below what many OPEC+ nations require to balance their budgets.

Factors such as slow demand growth in China and rising oil inventories in developed countries have put downward pressure on prices. The coalition, consisting of OPEC members and allies like Russia, has enacted several production cuts since late 2022.

Currently, the group is cutting production by 5.86 million barrels per day (bpd), which is about 5.7% of the global demand. That includes 3.66 million bpd in cuts initially set to expire at the end of 2024 and an additional 2.2 million bpd in voluntary cuts by eight members, which were due to end in June 2024.

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3.66 Million bpd Production Cuts

OPEC+ decided on Sunday to extend the 3.66 million bpd production cuts until the end of 2025 and the 2.2 million bpd voluntary cuts until the end of September this year. 

These voluntary reductions will be gradually phased out between October 2024 and September 2025, as the group expects a more stable economic environment and lower interest rates. 

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