In a significant move to stabilize oil prices, the United Arab Emirates and Saudi Arabia have announced the extension of their oil supply cuts until mid-2024. This decision aligns with Russia’s recent announcement to further reduce its oil production and exports.
The UAE’s Ministry of Energy confirmed that the nation would maintain its additional voluntary cut of 163,000 barrels per day (bpd) for the second quarter of 2024, keeping production capped at 2.912 million bpd until the end of June 2024. This extension is in addition to the UAE’s previous voluntary reduction of 144,000 bpd announced in April 2023.
Meanwhile, Saudi Arabia has committed to continuing its significant voluntary cut of one million barrels per day, which it initiated in July 2023, until the conclusion of the second quarter of 2024. This decision was communicated through the official Saudi Press Agency by an energy ministry source.
Simultaneously, Russia, as part of its coordination with certain OPEC+ member countries, declared an additional cut in its oil production and exports by 471,000 bpd for the second quarter of 2024. Russian Deputy Prime Minister Alexander Novak specified the reduction would include a 350,000 bpd decrease in oil production and a 121,000 bpd cut in exports for April, with varying proportions for the following months. These additional voluntary cuts are intended to reinforce the collective efforts of OPEC Plus countries to support the stability and balance of global oil markets.
Russia had previously agreed to voluntarily diminish oil and fuel exports by 500,000 bpd in the first quarter of 2024, alongside equivalent output cuts until the year’s end.
OPEC+ members, including Kuwait, Algeria, and Oman, have also announced their respective output reductions, contributing to the collective effort to support oil market stability. Kuwait will reduce its oil output by 135,000 bpd, Algeria by 51,000 bpd, and Oman by 42,000 bpd through June.
While OPEC anticipates robust demand growth of 2.25 million bpd for the year, led primarily by Asia, the International Energy Agency projects a more modest increase of 1.22 million bpd. These decisions by key oil-producing nations reflect a cautious approach amidst uncertainties surrounding global oil demand and economic conditions.
