The Organisation of Petroleum Exporting Countries and their allies, also known as OPEC+, at a meeting on Sunday decided to extend production cuts, which started in December 2022, to the end of 2025.
The group-wide cuts, which were set to end in December this year, will now extend to the end of 2025, according to a statement released by the group. Besides these, the voluntary production cuts of 2.2 million barrels per day, which are being undertaken by a few member countries, are set to continue till the end of 2024.
The group was widely expected to extend production cuts, which have helped to keep oil prices from falling sharply amidst concerns about demand. As of last close, brent crude settled at $81.37 dollars to the barrel.
Cumulatively, OPEC+ members are currently cutting output by a 5.86 million barrels per day. The voluntary cuts are being undertaken by Algeria, Iraq, Kuwait, Kazakhstan, Oman, Russia, Saudi Arabia and United Arab Emirates, and it was due to expire in June.
In an interesting development, United Arab Emirates has been allowed 300,000 barrels a day increase in production in phases starting January 2025.