Explainer: What OPEC+ Oil Output Cuts Are Currently in Place?

OPEC+ to Meet on Oil Production Policy

By Alex Lawler and Yousef Saba

LONDON – OPEC+ oil producers are set to convene on June 2 to determine their next steps regarding output policy. This includes the possibility of extending voluntary production cuts totaling approximately 2.2 million barrels per day (bpd), which are currently set to expire in the first half of 2024.

These voluntary cuts by the Organization of the Petroleum Exporting Countries and its allies, collectively referred to as OPEC+, supplement earlier reductions of 3.66 million bpd announced in multiple phases since late 2022. These earlier cuts remain in effect until the end of 2024.

In total, the pledged cuts now amount to 5.86 million bpd, accounting for about 5.7% of daily global demand.

Recent Cuts Overview

The most recent round of voluntary cuts, amounting to 2.2 million bpd, was initially announced by individual countries on November 30, 2023. Originally set for the first quarter of 2024, these cuts were later extended until the end of June, alongside a slight adjustment in how Russia would implement its reductions.

This 2.2 million bpd reduction includes an extension of existing voluntary cuts from Saudi Arabia and Russia from 2023, which totaled 1.3 million bpd, leaving the new component at approximately 900,000 bpd.

Previous Cut Details

Prior to the November 2023 announcement, OPEC+ had implemented production cuts totaling around 5 million bpd, which included 1.3 million bpd of Saudi and Russian voluntary cuts initiated earlier in 2023, as well as the 3.66 million bpd agreed upon in previous meetings.

Among the 3.66 million bpd cuts, 2 million bpd was established by OPEC+ in late 2022, while an additional 1.66 million bpd was decided in April 2023. During a meeting in June 2023, OPEC+ extended the 3.66 million bpd limits through the end of 2024.

Impact on Output Targets

The production targets and pledged cuts for the first half of 2024 are also outlined, demonstrating the complexities of these agreements among member countries. The data includes actual outputs and implied production targets after accounting for the voluntary cuts, reflecting the nuanced balance OPEC+ strives to maintain in aligning supply with global demand.

Summary of Pledged Cuts and Production Targets for H1 2024:

• Algeria: 0.051 bpd voluntary cuts, 0.908 bpd target
• Saudi Arabia: 1.000 bpd voluntary cuts, 8.978 bpd target
• Russia: 0.500 bpd voluntary cuts, 8.949 bpd target
• Total OPEC+ cuts: 2.2 million bpd

This upcoming meeting may significantly impact market dynamics and set the course for oil production in the near future.