The Organisation of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, yesterday, agreed to a general production cut for next and the extension of voluntary cuts by members to stabilise crude oil prices.
The organisation and its allies agreed to reduce overall production targets between January and December 2024 by 1.4 million barrels per day (bpd). With the reduction, total production by OPEC and non-OPEC members will stand at 40.463 million bpd.
After the decision was agreed upon, Saudi Arabia, the highest production quota, announced a production cut of one million bpd starting from next month.
Other members also accepted to extend earlier cuts till the end of next year.
Saudi’s output is expected to drop to some nine million bpd as against some 10 million bpd recorded last month.
The schedule of production level agreed at the end of the 35th OPEC and non-OPEC Ministerial Meeting in Vienna, Austria showed a production quota of 1.4 million bpd for Nigeria for next year, the eighth highest among the 20-member group.
Saudi Arabia has the highest at 10.5 million bpd, followed by Russia with 9.83 million bpd. Sudan has the lowest target of 64,000 bpd
In a communique issued at the end of the meeting, OPEC+ stated that the decisions were aimed at achieving and sustaining a stable oil market.
The cartel, which also welcomed the establishment of Dangote Refinery in Nigeria as well as two others in Kuwait and Saudi Arabia, explained that the production cuts and targets were taken as a precautious, proactive and pre-emptive approach.
The meeting decided to adjust the level of overall crude oil production for OPEC and non-OPEC participating countries to 40.46 mb/d, starting January 1 till December next year.
A breakdown of the required production level also shows Algeria, 1.007 million bpd; Angola, 1.3 million bpd; Congo, 276,000 bpd; Equatorial Guinea, 70,000 bpd; Gabon, 177,000 bpd; Iraq, 4.4m million bpd; Kuwait, 2.7 million bpd; Nigeria, 1.38 million bpd; United Arab Emirates (UAE), 3.22 million bpd; Azerbaijan, 551,000 bpd; Bahrain, 196,000 bpd; Brunei, 83,000 bpd; Kazakhstan, 1.63 million bpd; Malaysia, 401,000 bpd; Mexico, 1.8 million bpd; Oman, 841,000 bpd; Russia, 9.8 million bpd; Sudan, 64,000 bpd and South Sudan, 124,000 bpd.
The meeting reaffirmed and extended the mandate of the Joint Ministerial Monitoring Committee (JMMC) and its membership to closely review global oil market conditions, oil production levels and the level of conformity.
The meeting reiterated “the critical importance of adhering to full conformity, and subscribing to the concept of compensation by those countries who produce above the required production level”, in addition to their already decided production levels.
The 36th OPEC and non-OPEC Ministerial Meeting is scheduled to hold on November 26, 2023, in Vienna.
OPEC Secretary General, Haitham Al Ghais, had underlined the importance of enhancing refining capacity globally to meet the growing demand for oil products.
Al Ghais spoke at the 13th Technical Meeting of OPEC and non-OPEC countries participating in the Charter of Cooperation (CoC).
He praised OPEC member countries for their exceptional efforts in expanding their refining capacities by constructing refineries in Kuwait, Nigeria and the Kingdom of Saudi Arabia.
The OPEC boss also highlighted the importance of the technical discussions between OPEC Member Countries and non-OPEC countries of the CoC.
“As usual, this meeting has been organized for the technical experts of OPEC and participating non-OPEC producing countries and is centred on providing an opportunity to exchange views on key factors impacting oil market developments,” Al Ghais stated.