Raw materials

Oil, Opec+: cuts extended until 2025. Two million barrels per day less

The group of producing countries, as Bloomberg reports, has also decided to extend the voluntary restrictions of some countries into the third quarter of 2024

Viaggio nell’Isab di Priolo, la raffineria che progetta la transizione energetica

2' min read

2' min read

The Opec+ countries agreed to extend the current production cuts until the end of 2025 to support the prices of oil at a time of great economic and geopolitical uncertainty.

The organisation will 'extend the total level of crude oil production from 1 January 2025 to 31 December 2025', according to a statement.

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Viaggio nell’Isab di Priolo, la raffineria che progetta la transizione energetica

The cuts amount to approximately two million barrels per day. This strategy, initiated at the end of 2022 in response to falling prices, is designed to play on supply shortages and boost prices. In addition to this extension, Opec+ decided to increase the UAE production target by 300,000 barrels per day.

Abu Dhabi is one of the countries that agreed to further turn off the taps, at the request of Saudi Arabia.

Also Saudi Arabia and Russia, as well as Algeria, Oman, Kazakhstan, Kuwait and Iraq made additional efforts this year, which are expected to be renewed in 2025, according to the table published online.

No figures were provided at the time, as countries generally communicate them separately.

According to Rystad Energy analyst Mukesh Sahdev, however, Opec+ faces 'a major challenge': the barrels actually put on the market are 'probably higher than those registered', he observes. This could derail the cartel's strategy.

Iraq and Kazakhstan actually exceeded their quotas in the first quarter, while Russia overproduced in April. Since its last meeting in November, the group has managed to keep crude oil prices fairly stable, around $80 per barrel for both North Sea Brent and US WTI, without managing to get them off the ground. The organisation continues to maintain its demand forecasts for 2024 in one report after another, while the International Energy Agency (IEA) is less optimistic and has revised its estimates downwards.

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