OPEC+ Maintains Oil Output Policy Unchanged
In a decisive move, OPEC+ has opted to keep its oil output policy unchanged, sticking to a plan to begin unwinding one layer of output cuts starting in October.
Gathering online, top ministers from the Organization of the Petroleum Exporting Countries and its allies, including Russia, convened for a joint ministerial monitoring committee meeting on Thursday.
The oil producers’ alliance emphasized that the planned increase in output could be halted or reversed if necessary.
In a statement, OPEC+ members stated that the gradual phase-out of voluntary oil production reductions could be paused or reversed based on prevailing market conditions.
These countries had previously announced an extension of voluntary oil production reductions totaling 2.2 million barrels per day until September 2024, with a gradual phase-out planned on a monthly basis until September 2025.
Oil prices have experienced a decline from a 2024 peak above $92 per barrel in April to below $82, attributed to concerns about demand strength. However, support for prices has been seen this week due to escalating tensions in the Middle East.
Currently, OPEC+ is cutting output by 5.86 million barrels per day, equivalent to about 5.7 percent of global demand, as part of a series of agreed-upon steps since late 2022.
According to the official statement, “The Committee will continue to monitor the conformity of the production adjustments decided at the 37th ONOMM held on the 2nd of June 2024, including the additional voluntary production adjustments announced by some participating OPEC and non-OPEC countries and will continue to closely assess market conditions.”
During its previous meeting in June, the group had decided to extend cuts of 3.66 million barrels per day until the end of 2025 and prolong the latest round of cuts—2.2 million barrels per day by eight members—by three months until September 2024.
The meeting on Thursday also highlighted commitments from Iraq, Kazakhstan, and Russia to achieve full compliance with pledged output cuts, with plans in place to compensate for past overproduction.
The JMMC, which typically convenes every two months, has scheduled its next meeting for October 2.