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Opec+ cuts are here to stay for a while longer before unwinding: Opec+ decided to extend most of their crude oil production cuts well into 3Q 2024, according to a press release. The alliance will keep in place current production cuts of 3.66 mn barrels per day (bbl / d) until the end of this September, before beginning to “phase out the cuts of 2.2 mn bbl / d over the course of a year from October 2024 to September 2025,” Reuters reports. The group is scheduled to meet again on Sunday, 1 December 2024.
In context- Members of the group are currently slashing oil output by some 5.9 mn barrels per day, Reuters reports, in an effort to balance global oil markets and prop up prices against a backdrop of waning demand from China, and higher US shale production.
The UAE has also been granted a higher production quota of 3.5 mn barrels per day in 2025, up from the current 2.9 mn. This came despite the group pushing the deadline for an independent assessment of its members’ production capacities to November 2025 from this June, with the figures to be used as guidance for 2026 reference production levels.
REMEMBER- The UAE has been hoping to increase its capacity, and is on track to hit its 5 mn barrels per day (bbl / d) oil capacity target — originally set for 2027 — by the end of 2025 or early 2026.
Adnoc has ramped up drilling operations recently, drilling new wells in oil fields and connecting production sites to existing processing stations to squeeze out more deposits, the sources said. The oil giant raised its crude oil production capacity to 4.85 mn bbl / d from 4.65 mn bbl / d earlier this month. It also recently announced resumed operations at its Ras Al Sadr field in Abu Dhabi, and set up a JV to unlock “unconventional” energy resources in the emirate. Adnoc Gas also earmarked USD 13 bn over the next five years to expand in domestic and international markets, with plans to double its LNG production capacity by 2028.
This is aligned with what pundits had penciled in: Analysts speaking with Reuters and the New York Times had expected some or all of the cuts to be extended.
