Eight OPEC+ Members Extend Oil Supply Cuts Through December
In a strategic move to stabilize oil prices amidst uncertain demand and a surge in supply, eight members of the OPEC+ coalition have announced an extension of their oil supply cuts until the end of December. This decision, led by key players like Saudi Arabia and Russia, aims to address the challenges facing the oil market, especially with the upcoming US presidential election on the horizon. However, analysts caution that the impact on the market may be limited.
The Organisation of the Petroleum Exporting Countries, based in Vienna, revealed that the eight nations, including Algeria, Iraq, Kazakhstan, Kuwait, Oman, and the United Arab Emirates, have agreed to prolong their voluntary production adjustments of 2.2 million barrels per day for an additional month. This collective effort reflects concerns over a slowdown in demand, which has been weighing on oil prices in recent times.
Senior analyst Ipek Ozkardeskaya from Swissquote Bank described the extension as a “logical next step” in light of persistent downward pressure from weak demand in China and a global economic outlook that remains uncertain. Despite the extension, she emphasized that sustained improvements in oil prices would require additional measures to restrict production, considering that OPEC+ now accounts for less than half of global oil output.
Analyst Jorge Leon from Rystad Energy underscored the pivotal role of the upcoming US presidential election in shaping the oil market dynamics. He noted that a potential trade war, especially if Republican candidate Donald Trump secures victory, could further dampen oil demand, thereby influencing market trends.
The decision to extend the oil supply cuts until December signifies that the eight OPEC+ countries will not increase production until early 2025. While the initial plan in June was to boost production from October, this move is now subject to review, with ministers scheduled to convene in Vienna in early December for further discussions.
