The OPEC group held an online meeting yesterday, Sunday, June 2, to discuss oil production issues, and during the meeting a decision was reached to extend the current oil production cuts until the end of 2025.
As OPEC members are currently making production cuts of about 5.86 million barrels per day, which corresponds to about 5.7% of global demand, as these cuts include about 3.66 million barrels per day from OPEC members extending until the end of 2024, in parallel with voluntary cuts estimated at 2.2 million barrels per day for an additional three months until the end of September 2024, which are adopted by some members, headed by Saudi Arabia and Russia.
There is a plan for a gradual return to previous production levels over the next year, based on market conditions.
This step is important in the context of the current oil market, where there is uncertainty about the prospects for oil demand this year.
These forecasts range from OPEC's optimistic forecast of growth of 2.25 million barrels per day to the IEA's low forecast of 1.06 million barrels per day.
The OPEC group stressed the importance that the member countries that exceeded their production quotas, such as Iraq and Kazakhstan, commit to reducing production and compensating for the previous overproduction, in order to maintain market stability, and this reflects the group's commitment to monitor the global situation of the oil market, production levels and compliance with the agreement.
Saudi Energy Minister Prince Abdulaziz bin Salman said during a press conference yesterday in response to a question about whether OPEC supply cuts could restore inflationary pressures around the world, where he said that central banks with all due respect, are floundering in their messages, timidly heading towards the prospect of lowering interest rates.
OPEC wants concrete cuts in interest rates so that we take oil demand into account.
