Saudi Gazette report

RIYADH — Saudi Arabia and 7 other OPEC+ countries have agreed on Thursday to extend their voluntary oil supply cuts until the end of November, 2024. In a virtual meeting, these countries decided to postpone a planned output increase amid falling crude prices, the OPEC+ said in a statement.

The countries also include Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman. These countries decided to extend their additional voluntary production cuts of 2.2 million barrels per day for two more months until the end of November after which these cuts will be gradually phased out on a monthly basis starting from December 1, 2024.

This will be in accordance with an attached schedule, with the flexibility to pause or reverse the adjustments as necessary. The overproducing countries have also reconfirmed their commitment that the entire overproduced volume will be fully compensated for by September 2025. Previously these countries announced additional voluntary cuts in April and November 2023.

During Thursday’s meeting, the eight countries emphasized their collective resolve to ensure full compliance with the voluntary production adjustments. The group includes Iraq and Kazakhstan, which have overproduced since January 2024, but have strongly reaffirmed their commitment to the agreement and to their compensation schedules submitted to the OPEC Secretariat as agreed under the 53rd meeting of the Joint Ministerial Monitoring Committee on April 3, 2024.

In August 2024, Saudi Arabia, Russia, UAE, Kuwait, Algeria, and Oman held two ministerial discussions with Iraq and Kazakhstan. Both countries were urged to achieve full conformity and compensate for the overproduced volumes from January 2024. These two countries committed to engage with secondary sources to outline their plans for production adjustments to achieve compliance and meet the compensation schedules they submitted to the OPEC secretariat on August 22.

Iraq and Kazakhstan reinforced their commitment during the OPEC secretary general’s visits in late August, conducted in coordination with Saudi Arabia’s Minister of Energy and Chairman of the OPEC and non-OPEC Ministerial Meetings. During those visits, the OPEC Secretariat organized workshops with the secondary sources where both countries provided extensive details on the immediate and concrete measures they are implementing to achieve full conformity with the required production levels and to meet their compensation schedules for August and September.

These measures included advancing field maintenance plans and reducing production alongside delaying and canceling spot sales for the month of August. Moreover, the countries committed to adjust compensation plans for any over produced volumes in August. The decision of the eight countries to extend additional voluntary production cuts was taken in such a context, the statement added.