OPEC lowers its oil output target for 2024

PHOTO

OPEC+ has reached a deal to extend output cuts into 2024, after the oil cartel and its allies met on Sunday to try to agree further reductions in production.

Saudi Minister of Energy Prince Abdulaziz bin Salman al-Saud (L) arrives for the 35th OPEC (Organization OF Petroleum Exporting Countries) and non-OPEC ministerial meeting in Vienna, Austria, on June 4,2023. Opec+ ministers meet to try to find a solution to the slump in oil prices, with the possibility of a further production cut on the horizon, against a backdrop of tensions between Moscow and Riyadh. (Photo by JOE KLAMAR / AFP) (Agence France-Presse (AFP)/AFP)

Saudi Arabia will make an additional voluntary cut as part of the deal. Its energy ministry said that the kingdom will extend its 500,000 barrels per day (bpd) voluntary oil cut until the end of 2024, according to the state news agency.

Iraq said it will extend its voluntary cut of 211,000 bpd until the end of 2024.

Iraq's Deputy Prime Minister for Energy Affairs and Minister of Oil Hayan Abdulaghani Abdulzahra Alsawa (2nd right) arrives for the 35th OPEC (Organization OF Petroleum Exporting Countries) and non-OPEC ministerial meeting in Vienna, Austria, on June 4, 2023. There are growing signs that major oil producers led by Saudi Arabia and Russia are considering slashing production further when they meet on in a bid to prop up prices. (Photo by JOE KLAMAR / AFP) (Agence France-Presse (AFP)/AFP)

The Oman energy ministry stated that it will extend voluntary oil production cut by 40,000 bpd until the end of next year.

Though the details of the size of the overall supply cuts by OPEC members are not available, Reuters reported that the oil cartel has lowered its oil output target for next year by 1.4 million bpd versus current output targets.

The next OPEC and non-OPEC Ministerial Meeting will be held on Sunday 26 November 2023, in Vienna, the oil cartel said in a statement.

UAE's Minister of Energy and Industry Suhail al-Mazrouei arrives for the 35th OPEC (Organization OF Petroleum Exporting Countries) and non-OPEC ministerial meeting in Vienna, Austria, on June 4, 2023. There are growing signs that major oil producers led by Saudi Arabia and Russia are considering slashing production further when they meet on in a bid to prop up prices. Agence France-Presse (AFP). (Photo by JOE KLAMAR / AFP) — UAE's Minister of Energy and Industry Suhail al-Mazrouei arrives for the 35th OPEC (Organization OF Petroleum Exporting Countries) and non-OPEC ministerial meeting in Vienna, Austria, on June 4, 2023. There are growing signs that major oil producers led by Saudi Arabia and Russia are considering slashing production further when they meet on in a bid to prop up prices. (Photo by JOE KLAMAR / AFP) (AFP)

According to reports, formal talks were delayed by at least three hours due to members discussions on the side lines about production baselines, from which country quotas and reductions are derived.

Top OPEC members lead by Saudi Arabia were trying to persuade under-producing African nations such as Nigeria and Angola to have more realistic output targets, Reuters reported.

However, OPEC's production cuts in the past months have not helped in pushing up prices.

A view of logo of the Organization of the Petroleum Exporting Countries (OPEC) at their headquarters in Vienna, Austria, June 2, 2023. REUTERS/Leonhard Foeger (Reuters)

Oil prices have lost almost 15% after Saudi Arabia announced major supply reductions in April. Prices went up by $9 per barrel to above $87 only to plunge under pressure from concerns due to a recession. Brent prices settled at $76 on Friday.

(Reporting by Seban Scaria; editing by Daniel Luiz)

(seban.scaria@lseg.com)