OPEC+ Extends Oil Production Cuts to 2025

Riyadh, June 02, 2024 – The 37th OPEC and non-OPEC Ministerial Meeting, held via videoconference, concluded with a decisive reaffirmation of the Declaration of Cooperation (DoC) and an agreement to extend current crude oil production levels through the end of 2025. The meeting underscored the continued commitment of participating countries to market stability, long-term guidance, and transparency, reflecting the proactive and pre-emptive approach that has characterized OPEC+ cooperation since 2016. The decision, announced by the Saudi Press Agency, aims to sustain balance in global oil markets and support economic growth worldwide.

Context and Background

The Declaration of Cooperation, first signed on 10 December 2016 and further endorsed in subsequent meetings, represents a landmark partnership between OPEC and non-OPEC oil-producing nations. In 2019, the Charter of Cooperation was signed to institutionalize this collaboration. The 37th Ministerial Meeting built on this legacy, with participating countries reiterating their commitment to the DoC framework and its objectives. The meeting, chaired by Saudi Arabia’s Minister of Energy, Prince Abdulaziz bin Salman, and co-chaired by Russia’s Deputy Prime Minister, Alexander Novak, highlighted the unity of purpose among member states. The decision to extend production levels comes amid ongoing global economic uncertainties and geopolitical tensions, underscoring the group’s role as a stabilizing force in energy markets.

Key Details of the Agreement

The participating countries agreed to extend the overall crude oil production level for OPEC and non-OPEC countries until 31 December 2025. The required production levels for 2025 were set for each member, with Saudi Arabia at 10,478 thousand barrels per day (kb/d), Russia at 9,949 kb/d, and Iraq at 4,431 kb/d. Notably, the UAE’s production level was increased by 300 kb/d, to be phased in gradually from January to September 2025. The meeting also extended the assessment period by three independent sources to the end of November 2025, which will guide 2026 reference production levels. Furthermore, the Joint Ministerial Monitoring Committee (JMMC) was reaffirmed in its mandate to closely review global oil market conditions and compliance, with meetings scheduled every two months. The JMMC was also granted authority to call additional meetings if necessary. The next OPEC and non-OPEC Ministerial Meeting will be held on 1 December 2024.

Implications for Global Oil Markets

The extension of production levels provides much-needed certainty to global oil markets, which have been volatile due to fluctuating demand and supply disruptions. By maintaining current output, OPEC+ aims to prevent price shocks and support a balanced market. This decision is particularly significant as it offers long-term guidance to investors and consumers, enabling better planning and investment decisions. The gradual increase for the UAE reflects a recognition of its growing production capacity and its role in the alliance. The reaffirmation of the compensation mechanism underscores the group’s commitment to full conformity, ensuring that all members adhere to agreed quotas. This collective approach enhances the credibility of OPEC+ as a reliable partner in energy governance.

International Impact and Cooperation

The 37th Ministerial Meeting reinforces the pivotal role of OPEC+ in global energy diplomacy. The cooperation between OPEC and non-OPEC producers, particularly Saudi Arabia and Russia, has been instrumental in stabilizing oil markets since 2016. This collaboration extends beyond production adjustments; it fosters dialogue and mutual understanding among diverse oil-producing nations. The decision to extend the assessment period by independent sources demonstrates a commitment to data-driven decision-making and transparency. As the world transitions to cleaner energy sources, OPEC+ remains focused on ensuring a stable and reliable oil supply to support global economic development.

Vision 2030 Alignment

Saudi Arabia’s leadership in OPEC+ aligns with the Kingdom’s Vision 2030, which seeks to diversify the economy and reduce dependence on oil while maintaining a stable global energy market. By fostering cooperation and stability, Saudi Arabia reinforces its role as a responsible global energy leader. The Kingdom’s efforts to balance market interests with long-term sustainability reflect the forward-looking principles of Vision 2030. As the world’s largest oil exporter, Saudi Arabia continues to play a central role in shaping energy policies that benefit both producers and consumers, contributing to global prosperity and security.

20 Questions

Q1. What was the main outcome of the 37th OPEC and non-OPEC Ministerial Meeting?

A1. The meeting extended current crude oil production levels through 31 December 2025, reaffirmed the Declaration of Cooperation, and set production targets for member countries. It also extended the assessment period by independent sources to November 2025.

Q2. When was the Declaration of Cooperation originally signed?

A2. The Declaration of Cooperation was signed on 10 December 2016 and has been further endorsed in subsequent meetings. It represents a landmark partnership between OPEC and non-OPEC oil-producing nations to stabilize global oil markets.

Q3. What is the Charter of Cooperation and when was it signed?

A3. The Charter of Cooperation was signed on 2 July 2019 to institutionalize collaboration between OPEC and non-OPEC producers. It builds on the Declaration of Cooperation and provides a framework for long-term market stability.

Q4. What are the required production levels for Saudi Arabia in 2025?

A4. Saudi Arabia’s required production level for 2025 is 10,478 thousand barrels per day, before applying any additional production adjustments. This reflects the Kingdom’s role as a leading producer and its commitment to market balance.

Q5. How much did the UAE’s production level increase?

A5. The UAE’s required production level increased by 300 thousand barrels per day, to be phased in gradually from January to September 2025. This recognizes the UAE’s growing production capacity within the alliance.

Q6. What is the role of the Joint Ministerial Monitoring Committee (JMMC)?

A6. The JMMC closely reviews global oil market conditions, production levels, and conformity with the Declaration of Cooperation. It meets every two months and can request additional meetings to address market developments.

Q7. When will the next OPEC and non-OPEC Ministerial Meeting be held?

A7. The 38th OPEC and non-OPEC Ministerial Meeting is scheduled for 1 December 2024. It will continue to assess market conditions and ensure compliance with agreed production levels.

Q8. How often are OPEC and non-OPEC Ministerial Meetings held?

A8. The meetings are held every six months, in accordance with the ordinary OPEC scheduled conference. This regular schedule ensures consistent oversight of market conditions and production policies.

Q9. What is the purpose of extending the assessment period by independent sources?

A9. The assessment period, extended to the end of November 2025, provides guidance for 2026 reference production levels. This data-driven approach ensures transparency and accuracy in setting future production targets.

Q10. How is conformity with the Declaration of Cooperation monitored?

A10. Conformity is monitored using crude oil production data averaged from seven approved secondary sources, following the methodology applied for OPEC Member Countries. This ensures consistent and fair assessment across all participants.

Q11. What is the compensation mechanism mentioned in the meeting?

A11. The compensation mechanism requires countries that overproduce to compensate by reducing production in subsequent periods. It is critical for maintaining full conformity and market stability.

Q12. Which countries are part of the OPEC+ alliance?

A12. The OPEC+ alliance includes OPEC members and non-OPEC producers such as Russia, Kazakhstan, Mexico, Oman, and others. Together, they account for a significant share of global oil production.

Q13. What is the total production level for OPEC+ in 2025?

A13. The total required production level for OPEC+ in 2025 is 39,725 thousand barrels per day. This comprises 24,135 thousand barrels per day from OPEC and 15,590 thousand barrels per day from non-OPEC participants.

Q14. How does this decision impact global oil prices?

A14. By maintaining current production levels, OPEC+ aims to prevent price volatility and support market stability. This provides certainty to investors and consumers, helping to balance supply and demand in the global oil market.

Q15. Why is Saudi Arabia’s leadership important in OPEC+?

A15. Saudi Arabia, as the world’s largest oil exporter, plays a pivotal role in fostering cooperation and stability within OPEC+. Its leadership aligns with Vision 2030 and its commitment to responsible global energy governance.

Q16. What are the key principles guiding OPEC+ decisions?

A16. OPEC+ decisions are guided by principles of being precautious, proactive, and pre-emptive in addressing market challenges. This approach has been consistently adopted to achieve and sustain a stable oil market.

Q17. How does the meeting’s outcome support global economic growth?

A17. Stable oil markets contribute to global economic growth by providing reliable energy supplies and preventing price shocks. The decision supports investment and planning across industries reliant on oil.

Q18. What is the significance of the gradual production increase for the UAE?

A18. The gradual increase acknowledges the UAE’s growing production capacity and its role in the alliance. It allows for a phased adjustment, ensuring market stability while accommodating the UAE’s aspirations.

Q19. How does the meeting reflect OPEC+’s commitment to transparency?

A19. The meeting emphasized transparency through regular monitoring, data-driven assessments, and clear communication of production levels. This builds trust among members and with global markets.

Q20. How does this decision align with Saudi Arabia’s Vision 2030?

A20. The decision supports Vision 2030 by promoting market stability, which is essential for Saudi Arabia’s economic diversification. It reinforces the Kingdom’s role as a responsible energy leader and global partner.

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