Last November, OPEC+ agreed to voluntary oil production cuts totaling about 2.2 million barrels per day. These cuts begin in the first quarter of this year, with Saudi Arabia rolling over a 1 million bpd voluntary reduction. Now, sources within OPEC+ have informed Reuters that coalition members are scheduled to discuss whether or not to extend oil production cuts in March.
Two OPEC+ sources tell the media outlet that production cuts will be reviewed in March. They said an announcement will follow the meeting and reveal if these voluntary cuts will be extended.
On Thursday, OPEC member Algeria said it was committed to continue voluntary cuts into the second quarter if needed. Kuwait said it was committed to the supply curbs but gave no firm answer if they should be extended.
Earlier on Thursday, leading ministers from OPEC+ gathered in an online discussion about market conditions and oil production levels and made no changes to the current policy.
“The meeting was a very healthy, quick meeting and what we noticed is that there is good cohesion among members. There was reiteration of commitments,” another OPEC+ source said.
OPEC countries and allies have implemented supply curbs to prevent a global supply surplus from crashing crude prices. They’re also dealing with slowing demand growth (China) and US shale production soaring, sending total US crude production to new records.
Prices of Brent crude have chopped around $80 a barrel for more than a year, despite recent conflicts erupting in the Middle East and Iran-backed Houthi rebels attacking dozens of commercial vessels with suicide drones and missiles in the Red Sea.
The latest International Energy Agency forecast revealed that global oil markets could slide back to a surplus next quarter and remain oversupplied through this year – if OPEC+ eases curbs and revives production.
All eyes are on OPEC+’s March decision, as any announcement will likely spark volatility in global energy markets.