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Saudi Arabia and other members of Opec+ have delayed a plan to begin raising oil production until the end of the year, as the group tries to revive crude prices that have continued to flag despite turmoil in the Middle East.
The world’s largest oil exporter and seven others, including Russia, Iraq, the UAE and Algeria, would leave all output cuts in place until the end of December, Opec said in a statement.
The eight countries had been due to start unwinding voluntary cuts, but have postponed the plan for at least another month amid persistent weakness in the oil price.
The planned increases would have lifted the group’s production by 180,000 barrels a day by December, as part of a gradual unwinding of 2.2mn of cuts over 12 months.
Brent crude has fallen by almost 14 per cent over the past 12 months, in part because of concern over demand from China. It closed at $73 on Friday, having briefly dropped below $70 in September, to its lowest since December 2021.
“The Opec Secretariat noted that the eight Opec+ countries Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman […] have agreed to extend the voluntary production adjustments,” the group’s statement said.
The statement also reaffirmed a commitment to the cuts by Iraq, Russia and Kazakhstan, which had previously frustrated other members, particularly Saudi Arabia, by pumping more than their quotas.
Postponing the unwinding of the cuts for another month also enables the group to delay a decision on production levels for 2025 until after the US election, analysts said. Opec+ members are due to meet in person on December 1 in Vienna, when a final decision is expected.
US voters are set to head to the polls on Tuesday. Republican candidate Donald Trump has said he wants to halve energy prices within a year of taking office.
Oil prices have reacted to escalating conflict in the Middle East over the past year, but have tended to pare short-term gains as macroeconomic factors come back to the fore.
Prices fell more than 6 per cent last Monday after Israeli strikes on Iran stopped short of targeting oil and nuclear facilities, which calmed the market and put the focus back on China’s economic outlook.
They climbed only slightly on Friday after Major General Hossein Salami, head of Iran’s elite Revolutionary Guard Corps, vowed that Tehran would deliver an “unimaginable” response to the strikes.
On Saturday Ayatollah Ali Khamenei, the Islamic republic’s supreme leader, threatened Israel with a “crushing response”.
