Opec+ Compliance to Oil Production Cuts

The Organization of Petroleum Exporting Countries (Opec) and its allies’ led by Russia (together known as Opec+) will begin to gradually increase crude oil production as of 1 April, 2025, in line with their previous commitments and resisting calls from the US President Trump to lower oil prices by raising production in the short term.

In a meeting of the Opec+ alliance on 3 February, the Joint Ministerial Monitoring Committee (JMMC) emphasized the critical importance of achieving full conformity and compensation, and reaffirmed that they will continue to monitor adherence to the production adjustments agreed upon at the 58th Opec and non-Opec ministerial meeting held on 5 December, 2024.

Deputy Prime Minister of Russia, Alexander Novak, who co-chaired the 58th meeting of the Opec+ JMMC said, “The countries’ ministers emphasized their commitment to balancing the market and coordinating their actions within Opec+. The deal will be in effect until the end of 2026 in the interest of both exporters and oil consumers, because it is important to maintain balance on the complex and capital-intensive oil market with long investment cycles. As a result, we can see investments and the balance of demand and supply restoring. These are the goals that the deal is pursuing.”

Opec+, the group responsible for producing roughly half of the world's oil, initially intended to begin gradually increasing their production levels from October of last year, but due to a slowdown in global demand and rising output elsewhere, they were forced to repeatedly delay these plans.

Opec+ members had cut output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand, since late 2022. It includes 2 million bpd of cuts by all the member countries, 1.65 million bpd of the first stage of voluntary cuts by eight member countries viz. Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman, and another 2.2 million bpd of the second stage of voluntary cuts by the same eight countries.

Despite the supply cuts, global oil benchmark Brent crude averaged around $81 a barrel in 2024.

At the December, 2024 meeting, Opec+ agreed to extend the 2 million bpd and the 1.65 million bpd of cuts for another one year until the end of 2026. The next, 59th meeting of the Opec+ Joint Ministerial Monitoring Committee is scheduled for 5 April.

Opec+ members’ additional voluntary production adjustments have been stated to be a key factor in ensuring stability within the oil market.

Editor