Several OPEC+ countries reducing oil production

Several OPEC+ countries, including Saudi Arabia and Russia, have begun voluntarily reducing oil production by 2.2 million barrels per day (bpd) since January 2024.

The measure will be in effect throughout the first quarter, and then the OPEC+ oil producers’ alliance can begin to gradually return reduced volumes to the market depending on market conditions, TASS reports.

The alliance countries agreed on additional voluntary reduction in oil production to balance the market following the OPEC+ meeting held on November 30, 2023.

Thus, Saudi Arabia will reduce production by one million bpd till late March 2024, Russia will reduce oil supplies from 300,000 bpd to 500,000 bpd.

Several more OPEC+ countries will reduce production by almost 700,000 bpd in total, namely, Iraq - by 223,000 bpd, UAE - by 163,000 bpd, Kuwait - by 135,000 bpd, Kazakhstan - by 82,000 bpd, Algeria - by 51,000 bpd, Oman - by 42,000 bpd. These cuts are not included in the OPEC+ deal and are voluntary. 

Taking into account that Saudi Arabia has been reducing the oil production since July 2023 and does not increase it while Russia is adding 200,000 bpd to the reduced supply volumes, the corresponding volume for the market will reach 896,000 bpd.

Besides the new cuts, several OPEC+ countries will also continue adhering to their commitments to voluntarily reduce production in the amount of 1.66 million bpd till late 2024.

This measure has been in effect since May 2023. According to the assumed obligations, Saudi Arabia voluntarily reduces production by 500,000 bpd, Russia - also by 500,000 bpd, Iraq - by 211,000 bpd, UAE - by 144,000 bpd, Kuwait - by 128,000 bpd, Kazakhstan - by 78,000 bpd, Algeria - by 48,000 bpd, Oman - by 40,000 bpd, Gabon - by 8,000 bpd.

The renewed oil production quotas have been applied as part of the OPEC+ deal since 2024.

For example, the permitted production level for Russia was reduced from 10.478 million bpd to 9.949 million bpd, for Azerbaijan - from 684,000 bpd to 551,000 bpd while for the UAE, on the contrary, the quota was increased from 3.019 million bpd to 3.219 million bpd.

According to TASS calculations, the OPEC+ countries’ oil production quotas have been reduced by 1.321 million bpd to 40.535 million bpd since 2024.