S.Arabia to trim output by 1M bpd in July as OPEC+ vows to maintain current policy

ANKARA

The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, confirmed on Sunday they would keep their current output cuts unchanged until the end of the year, with additional voluntary production cuts from Saudi Arabia of around 1 million barrels per day (bpd) in July.

The decision came during the 35th OPEC and non-OPEC Ministerial Meeting held in Austria’s capital Vienna.

According to a statement issued after the meeting, OPEC+ endorsed their previous output cut decisions in order “to achieve and sustain a stable oil market.”

Speaking during the meeting, Saudi Energy Minister Abdulaziz bin Salman said on top of the voluntary cuts of around 1.6 million bpd in April, Saudi Arabia will cut another 1 million bpd in July, which, he added, “is also extendable.”

Last October, OPEC+ agreed to cut their crude oil production by 2 million bpd until the end of 2023, but the group added a further cut of around 1.6 million bpd in April with voluntary cuts of several member countries. Saudi Arabia led the way with 500,000 bpd starting in May.

Described by Salman as “a Saudi lollipop,” the latest voluntary cut of 1 million bpd in July will reduce the country’s total production by 1.5 million bpd until the end of the year if extended, bringing its production to 9 million bpd.

- Production quotas will be revised for next year

OPEC+ also said it will cap total oil output at 40.463 million bpd from January to December 2024. By the end of June 2024, this amount will be reassessed by three independent sources, including IHS, Wood Mackenzie, and Rystad Energy, in order to identify countries’ production capacities.