OPEC+ plans to keep oil production cuts unchanged

The OPEC+ group doesn’t have any plans to alter the current oil production policy and cuts when the alliance’s monitoring panel meets next week, OPEC+ delegates told Bloomberg on January 26.

Illustrative image

OPEC’s Joint Ministerial Monitoring Committee (JMMC), which takes stock of oil market developments and recommends actions to the full ministerial meetings, is scheduled to hold an online meeting on February 1.

Part of the current oil production cuts only started at the beginning of January, so OPEC+ will need more time to review and assess what impact the output reduction has had on market balances, Bloomberg’s anonymous sources said.

OPEC+ members collectively decided to voluntarily cut 2.2 million bpd from the group’s production this quarter, although much of that was production cuts that were already in effect, including Saudi Arabia’s 1 million bpd voluntary cut.

Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, told Bloomberg last month that the OPEC+ production cuts could extend beyond March 2024 if the market requires it.

The Saudi energy minister also criticized commentators for failing to understand the output deal and suggested that this would change once “people see the reality of the deal.”

Both Saudi Arabia and Russia – the OPEC+ leaders – have said, via their respective top oilmen, that OPEC+ is ready to extend or deepen the oil production cuts if needed.

The group is ready to take additional measures and deepen the oil production cuts in the first quarter of 2024 to avoid volatility and speculation on the market, Russia’s Deputy Prime Minister Alexander Novak said early last month.

Analysts will be watching closely all OPEC+ decisions and speculation this year as they reckon that a large part of oil market fundamentals and balances will depend on the group’s policy to manage supply in the first quarter of the year and for the rest of 2024.