By Adedapo Adesanya
Eight members of the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) on Sunday announced the extension of supply cuts until the end of December.
The eight from the 22-member group extending the cuts are leaders Saudi Arabia and Russia, as well as Algeria, Iraq, Kazakhstan, Kuwait, Oman and the United Arab Emirates.
The move is aimed at boosting oil prices amid uncertain demand and accelerating supply, with an eye on the imminent US presidential election, though analysts predict a limited impact.
The eight countries “have agreed to extend the November 2023 voluntary production adjustments of 2.2 million barrels per day for one month until the end of December 2024”, the Vienna-based cartel said in a statement, seen by Business Post.
Nigeria, which is Africa’s largest oil producer, is not among because the country hasn’t been able to meet its OPEC Quota of 1.5 million barrels per day due to weak infrastructure and oil theft, which serves as constraints to attaining optimal production.
OPEC+ has been delaying production increases amid concerns over slowing demand, which has weighed on oil prices in recent months.
Market analysts expected this due to sluggish Chinese and weakening global demand outlook, which is worsened by increased production from countries that don’t belong to the alliance.
Prices have been affected yearly, and although they occasionally receive boosts from tensions in the Middle East, these do not have long-term impacts.
OPEC+ ministers are due to meet on December 1 in Vienna at the group’s headquarters, but with Sunday’s announcement, the eight countries have already decided not to reopen the taps until at least early 2025.
During the last ministerial meeting in June, OPEC+ announced that it wanted to increase production starting in October, though it stressed that this decision could be reviewed at any time.
Dipo Olowookere