Eight members of the OPEC+ coalition announced on Sunday that they will extend their oil supply cuts until the end of December. This decision is part of a strategy to bolster oil prices due to uncertain demand and a surge in supply, particularly in light of the upcoming US presidential election, although analysts predict only limited effects on the market.
The Vienna-based Organisation of the Petroleum Exporting Countries stated that the eight nations, which include key players like Saudi Arabia and Russia, have agreed to prolong their voluntary production adjustments of 2.2 million barrels per day for one month. Alongside Saudi Arabia and Russia, the other members extending the cuts are Algeria, Iraq, Kazakhstan, Kuwait, Oman, and the United Arab Emirates.
These countries have opted to delay production increases due to concerns over a slowdown in demand, which has pressured oil prices in recent months. Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, described the extension as a “logical next step” given the persistent downward pressure from weak demand in China and a broader global outlook that remains uncertain.
Ozkardeskaya cautioned that any potential boost to oil prices is unlikely to be sustained unless OPEC+ takes additional measures to restrict production. She noted that the grouping now accounts for less than half of global oil output, limiting its influence on the market.
Jorge Leon, an analyst at Rystad Energy, highlighted the significance of the November 5 US presidential election, suggesting it could profoundly affect the oil market. He mentioned that a potential trade war, particularly if Republican candidate Donald Trump wins, could lead to decreased demand for oil.
OPEC+ ministers are scheduled to meet in early December in Vienna, but the latest announcement indicates that these eight countries will not increase production until at least early 2025. In their last ministerial meeting in June, OPEC+ had announced plans to increase production from October, but that decision remains subject to review.
