Are OPEC+ 2024 Voluntary Cuts Enough to Support Oil Prices?

Key Points:

• OPEC+ plans nearly 2 million bpd in voluntary production cuts for early 2024.
• Saudi Arabia will extend its 1 million bpd cut until at least Q1 2024.
• Russia, Iraq, and UAE also commit to cuts in the first quarter.
• Brazil’s potential increase in output could disrupt the planned cuts.
• WTI crude oil price dropped over 2% to $75 per barrel post-meeting.

OPEC+ has announced nearly 2 million barrels per day (bpd) in voluntary production cuts for early 2024 in response to market surplus concerns and the conclusion of Saudi Arabia’s 1 million bpd cut. Following the meeting, the price of WTI crude oil fell more than 2% to $75 per barrel, ending a brief two-day gain.

Saudi Arabia has committed to extending its cut of 1 million bpd until at least the first quarter of 2024. Russia will maintain its cut at 500,000 bpd for the same period. Iraq has agreed to reduce output by 211,000 bpd, and the UAE will cut 160,000 bpd in Q1 2024.

However, Brazil has been invited to join OPEC+ and is expected to increase its oil output to 3.8 million barrels per day starting in January, potentially countering the collective efforts to reduce production and stabilize prices.