Vienna, Austria – The Organization of Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, have reached an agreement to implement a general production cut in the coming year and extend voluntary cuts by member countries in order to stabilize crude oil prices.
Under the agreement, overall production targets will be reduced by 1.4 million barrels per day (bpd) between January and December 2024. This will bring the total production of OPEC and non-OPEC members to 40.463 million bpd.
Following the decision, Saudi Arabia, which has the highest production quota, announced a reduction of one million bpd starting next month. Other member countries have also agreed to extend their earlier cuts until the end of next year.
Saudi Arabia’s output is expected to drop to approximately nine million bpd, compared to the roughly 10 million bpd recorded last month.
According to the production levels agreed upon at the 35th OPEC and non-OPEC Ministerial Meeting, Nigeria has a production quota of 1.38 million bpd for next year, making it the eighth-highest among the 20-member group. Saudi Arabia has the highest quota at 10.5 million bpd, followed by Russia with 9.83 million bpd. Sudan has the lowest target of 64,000 bpd.
In a communique issued at the conclusion of the meeting, OPEC+ stated that the decisions were made with the aim of achieving and maintaining a stable oil market. The cartel also welcomed the establishment of the Dangote Refinery in Nigeria, as well as two others in Kuwait and Saudi Arabia. The production cuts and targets were viewed as a precautionary, proactive, and preemptive approach.
The meeting also decided to adjust the level of overall crude oil production for participating OPEC and non-OPEC countries to 40.46 million bpd, effective from January 1 until December next year.
The meeting reaffirmed the importance of adhering to full conformity and subscribing to the concept of compensation for countries that exceed the required production levels. The mandate of the Joint Ministerial Monitoring Committee (JMMC) was extended to closely review global oil market conditions, production levels, and conformity.
The 36th OPEC and non-OPEC Ministerial Meeting is scheduled to take place on November 26, 2023, in Vienna.
OPEC Secretary General Haitham Al Ghais emphasized the significance of enhancing global refining capacity to meet the growing demand for oil products. Al Ghais praised OPEC member countries for their efforts in expanding refining capacities through the construction of refineries in Kuwait, Nigeria, and Saudi Arabia. He also highlighted the importance of technical discussions between OPEC member countries and non-OPEC countries participating in the Charter of Cooperation (CoC).
