The expanded Organization of Petroleum Exporting Countries (OPEC+) wants to produce less oil next year. The oil cartel had already announced a reduction in production in April – this had little effect on the oil price.
According to its own statements, the oil cartel OPEC + wants to produce around 40 million barrels (159 liters each) a day in the coming year. According to calculations by the Russian agency Tass, this means a reduction in the total OPEC+ production volume by 1.39 million barrels per day, i.e. almost 3.4 percent.
Hours of tough negotiations in Vienna preceded the decision of the 23-state alliance. In the run-up, Saudi Arabia in particular had fueled speculation that a decision on a further production limit could be made. Russia, on the other hand, had signaled that there was no additional need for action.
Oil prices have been falling for a year
In October 2022, the countries had already agreed to cap production by two million barrels per day. In view of the deteriorating economic prospects and a falling oil price, several OPEC+ members surprisingly agreed in April on additional production cuts of 1.66 million barrels (159 liters each) from May, which should initially last until the end of the year.
Apart from a brief spike in April, oil prices have been falling for around a year. In mid-2022, a barrel of OPEC oil cost around 115 dollars (equivalent to 107 euros), currently it is around 75 dollars (70 euros).
OPEC+, which brings together the Organization of Petroleum Exporting Countries (OPEC) and other producers such as Russia, produces around 40 percent of the world’s supply.
Several countries are voluntarily curbing production
At the same time, several OPEC countries have decided to renew or extend their voluntary throttling. Saudi Arabia promised a voluntary reduction in oil production of one million barrels a day in July, which could also be extended over time.
According to the Reuters news agency, Russia also announced that it would increase production by half a million barrels a day until the end of 2024. Iraq wants to cut production by 211,000 barrels a day.