logo of the Organisation of the Petroleum Exporting Countries (OPEC)
A view of the logo of the Organisation of the Petroleum Exporting Countries (OPEC) outside their headquarters in Vienna, Austria. Image Credit: REUTERS

OPEC+ agreed on Sunday to extend most of its deep oil output cuts for 2024 but to start phasing them out in 2025, as the group seeks to shore up the market amid tepid global demand growth, high interest rates and rising rival U.S. production.

Oil prices trade near $80 per barrel, below what many OPEC+ members need to balance their budget. Worries over slow demand growth in top oil importer China have weighed on prices alongside rising oil stocks in developed economies.

The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, have made a series of deep output cuts since late 2022.

OPEC+ members are currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand.

The cuts include 2 million bpd by all OPEC+ members, the first round of voluntary cuts by nine members of 1.66 million bpd, and the second round of voluntary cuts by eight members of 2.2 million bpd.

OPEC+ extended the the first round of cuts until the end of 2025 from the end of 2024, the group said in a statement.

It also agreed to extend the third round of voluntary cuts into the third quarter of 2024, OPEC+ sources said, adding that more details were being worked out and would be announced on Sunday.

The countries which have made voluntary cuts in the second round are Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates and Gabon. The same countries except Gabon participated in the third round.

The group also agreed to allocate the United Arab Emirates a higher production quota of 3.5 million bpd in 2025, up from the current level of 2.9 million.

OPEC+ also postponed the deadline for an independent assessment of its members' production capacities to the end of November 2025 from June 2024. The figures will be used as guidance for 2026 reference production levels.

OPEC+ will hold its next meeting on Dec. 1, 2024.