The UAE and Saudi Arabia announced they would extend oil supply cuts until mid-2024 as part of a bid to prop up prices. The moves also coincided with Russia revealing plans to further cut its oil output and exports.
The UAE will extend its additional voluntary cut of 163,000 barrels per day (bpd) for the second quarter of 2024, with production remaining at 2.912 million bpd until the end of June 2024, according to a statement to WAM. This voluntary cut is in addition to the voluntary cut of 144,000 bpd previously announced by the UAE in April 2023.
An energy ministry source announced Riyadh “will extend its voluntary cut of one million barrels per day, which was implemented in July 2023, until the end of the second quarter of 2024,” the official Saudi Press Agency reported.
Separately, Russian Deputy Prime Minister Alexander Novak said that it will cut oil production and exports by an additional 471,000 barrels per day (bpd) in the second quarter of 2024 in coordination with some OPEC+ participating countries.
Of that, the country will reduce oil production by additional 350,000 bpd while exports will be cut by 121,000 bpd in April. In May, the additional oil output cut will stand at 400,000 bpd and exports at 71,000 bpd. In June, all the additional cuts will be from oil output, Novak said.
The export cut will be made from the average export levels of the months of May and June of 2023, he added.
“This additional voluntary cut comes to reinforce the precautionary efforts made by OPEC Plus countries with the aim of supporting the stability and balance of oil markets,” Novak said in a statement.
Russia had previously agreed to voluntarily reduce oil and fuel exports by 500,000 bpd in the first quarter, in addition to voluntary cuts of output by the same scale until the end of 2024. OPEC+ member countries announce the cuts individually.
OPEC+ in November agreed to voluntary cuts totalling about 2.2 million barrels per day (bpd) for the first quarter, led by Saudi Arabia rolling over its own voluntary cut.
OPEC+ has implemented a series of output cuts since late 2022 to support the market amid rising output from the United States and other non-member producers and worries over demand as major economies grapple with high interest rates.
Kuwait said it would cut its oil output by 135,000 bpd through June, while Algeria will curb its output by 51,000 bpd and Oman will reduce output by 42,000 bpd.
The oil demand outlook is uncertain for this year. OPEC expects another year of relatively strong demand growth of 2.25 million bpd, led by Asia, while the International Energy Agency expects much slower growth of 1.22 million bpd.
