OPEC+ announces 2 million barrels per day production cut to address falling oil prices
In a virtual meeting on Thursday, OPEC+ members, including the United Arab Emirates, Iraq, and Russia, reached an agreement to cut oil production by two million barrels per day.
Saudi Arabia also declared an extension of its production cuts by an additional one million barrels per day.
This decision, which collectively involves major oil-producing countries supplying over 40% of the world's oil, is expected to impact oil prices positively amid ongoing conflicts in the Middle East.
Following the announcement, the price of Brent oil experienced a 1.3% increase, reaching $83.49 per barrel.
The United Arab Emirates, in a voluntary measure, disclosed plans to reduce oil production starting next month until the end of March 2024, aiming for a quarterly production of 2,912,000 barrels per day.
The UAE committed to gradually increasing production afterward based on market conditions.
Russia, another key player in the OPEC+ alliance, is reportedly set to cut its production by 500,000 barrels per day.
Analysts suggest that the decision to focus on lower production is a response to concerns over weak economic growth in 2024, lower oil prices, and the potential for oversupply.
The International Energy Agency's forecast of decreased demand in the coming year, influenced by factors like increased energy source efficiency and the rise of electric vehicles, further shaped the discussions.
The OPEC+ meeting coincided with the commencement of the United Nations climate summit, "Cop28," hosted by the United Arab Emirates, an OPEC member.
The decisions made by these major oil-producing nations carry significance amid efforts to balance global oil markets and address environmental concerns.
