Ministers of OPEC oil producers and allies, including Russia, agreed on Sunday in Vienna to maintain the current reduction in the “black gold” production until the end of this year. The countries backed out of the new cut, as Saudi Arabia voluntarily agreed to reduce its production.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman has announced a further voluntary cut in oil production by 1 million barrels per day in July, with the possibility of a further extension, his ministry said, AP reports.
This production cut is in addition to the existing cut of two million barrels per day and voluntary production reductions of another 1.6 million barrels, announced in April and implemented in May. By counting the existing reductions, Saudi Arabia will produce about nine million barrels of oil daily in July, or 1.5 million barrels less than before the pandemic.
The meeting in Vienna lasted seven hours, and the ministers of the OPEC+ countries agreed to reduce total production by 1.4 million barrels per day from 2024, reports Reuters. Russian Minister Aleksandar Novak announced that voluntary production reductions would continue next year. Oil prices rose on Monday morning by more than one percent.
The OPEC+ countries, which produce about 40 percent of the world’s oil, have announced that they will limit production to 40,463 million barrels per day next year. The next meeting of the ministers of the OPEC+ countries will be in November this year.
Uncertain Agreement on The Additional Reduction of Oil Production
Ministers of the OPEC+ countries, led by Saudi Arabia and Russia, met in Vienna to agree on an additional reduction in oil production. The group reached the agreement later (around noon), and according to sources from the meeting, they are discussing reducing production by an additional million barrels per day.
The start of the session was delayed due to disagreements between the organization’s key countries and African members who did not want to give up part of their production quotas in favor of the United Arab Emirates, Bloomberg reported. African producers, specifically Nigeria and Angola, had to reduce their quotas, as they could not meet them in previous months.