OPEC+ Extends its Extra Supply Cuts of 2.2 Million Barrels/Day Until the End of Q2 2024
OPEC+ Oil Supply Cuts Extension
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, have implemented a series of output cuts since late-2022 to the tune of 3.66 million barrels per day (mbpd), to last until the end of 2024. The group known as OPEC+ agreed in October to additional voluntary cuts of 2.2 mbpd, for the first quarter of the current year.
On Sunday, members decided to rollover those extra cuts until the end of Q2, keeping the total supply curbs to nearly 5.9 mbpd. Saudi Arabia, the de facto leader of OPEC, is the biggest contributor and accounts for one million barrels of the cuts. Russia will curb supply by 471 thousand barrels in the second quarter, with most coming from production curbs and less from export restrictions. [1]
The output reduction program implemented by OPEC+ is a response to falling prices after in the second half of 2022, following the roughly twenty-two years peak earlier that year. The commodity lost ground in 2023, as the Q3 rebound was erased in the final quarter of the year.
Prices have found support in 2024 due to the war in the Middle East and the continued hostilities in the Red Sea, which along with the action of OPEC+, restrain supply. However, supply is a less potent upward driver than demand creation and things are not as encouraging around the latter.
Based on its February report, OPEC believes that global demand growth this year will remain largely unchanged from 2023, at 2.25 million barrels per day. [2] The International Energy Agency (IEA) on the other hand, forecasts a sharp deceleration to 1.2 mbpd. Furthermore, the agency expects that higher global supply from non-OPEC+ producers "should more than eclipse the expected rise in world oil demand". [3]
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 04 Mar 2024 https://www.opec.org/opec_web/en/press_room/7305.htm | |
| Retrieved 04 Mar 2024 https://www.opec.org/opec_web/en/publications/338.htm | |
| Retrieved 17 Apr 2026 https://www.iea.org/reports/oil-market-report-february-2024 |
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