The Organisation of Petroleum Exporting Countries (OPEC) has extended oil production cut put in place in November last year till 2025, with Nigeria maintaining its oil production quota at 1.5 million barrels per day.
OPEC and its allies led by Russia, known as OPEC Plus, are presently reducing oil output by 5.86 million barrels per day in an attempt to shore up oil prices at the international market.
The agreement, reached on Sunday, exceeds market expectations in some ways, but also begins rolling back supply reductions in October, earlier than assumed. Saudi Arabia, the group leader, aims to balance competing interests and maintain a precautious approach.
The deal supports crude prices while easing production restraints, which some members, like the UAE, have opposed. The extension adds 750,000 bpd to the market by January and prolongs 2MMbpd of cuts, supporting prices above $80 a barrel.
The curbs will continue in full in the third quarter, then be phased out over 12 months. Reaction is mixed, with some analysts seeing a bullish impact and others concerned about the market’s ability to absorb extra barrels in October. If oil prices fall further, it could improve the economic outlook but threaten revenue for producers like Saudi Arabia.
The agreement resolves a debate on oil capacity, pushing back the deadline for completion to November 2026, and grants the UAE a 300,000 bpd boost to its production target. To maintain tight market conditions, the coalition must ensure members fully implement their pledged cutbacks.
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