Is OPEC+ planning a big move? Media say new production cuts may reach 1 million b/d

Zhitong Finance ·  11/30/2023 06:00

Sources close to OPEC+ said that before Thursday's ministerial meeting, the organization held talks on 2024 oil policy

The Zhitong Finance app learned that sources close to OPEC+ said that before Thursday's ministerial meeting, the organization held talks on 2024 oil policy, focusing on additional oil supply cuts to support the market, although details have not yet been agreed upon.

Saudi Arabia, Russia, and other OPEC+ member countries currently produce about 43 million barrels of oil per day, accounting for more than 40% of global supply. They have cut supply by about 5 million b/d, or about 5% of global demand.

Two OPEC+ sources said the organization is discussing further deepening collective supply cuts in the first quarter, but the exact duration and quantity are unclear. One of the sources said that OPEC+ may not be able to reach an agreement on this and may continue the current policy. According to foreign media reports, the new production reduction could reach 1 million b/d.

On Tuesday, some sources said that the meeting of the Organization of Petroleum Exporting Countries and its allies originally scheduled for Thursday may be further postponed, although as of Wednesday evening, it looks like the meeting will go ahead as planned.

The conference was originally scheduled to be held on November 26, but was postponed due to differences among African oil producers over production quotas. Despite this, there are sources that the organization has solved the problem to a large extent.

The quota negotiations for African oil producers are taking place in the context of the UAE being allowed to increase production in 2024 in accordance with the last OPEC+ agreement in June.

OPEC+ negotiations on production quotas have often been troubled in the past. The most recent time was at the June meeting. The meeting extended current oil production cuts until 2024 and agreed to increase production in the UAE because it has expanded production capacity.

Saudi Arabia, Russia, and other OPEC+ members have promised total production cuts of around 5 million b/d as part of a series of measures starting at the end of 2022. This includes Saudi Arabia's additional voluntary cut of production by 1 million b/d, the measure which expires at the end of December, and Russia's export cuts of 300,000 b/d by the end of this year.

The translation is provided by third-party software.

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