After delaying its meeting due to a disagreement over 2024 production quotas for a handful of African members, OPEC+ finally met yesterday to discuss production policy for next year. Instead of seeing further cuts spread across the entire group, it was left up to individual members to decide whether they would make deeper voluntary cuts to supply.
Eight OPEC+ members decided to announce new additional cuts for a total of almost 2.2 million barrels/d for 1Q24. However, this includes the extension of Saudi Arabia’s current additional voluntary cut of 1 million barrels/day, as well as Russia’s export cut of 500 million barrels/day (deeper than its current cut of 300 million barrels/day). barrels/day). We had already assumed the extension of the Saudi and Russian cuts in 1Q24, like most of the market. Therefore, 1Q24 will see new additional cuts of just under 900Mbbls/d. These additional voluntary cuts will be gradually brought to the market after 1Q24 depending on market conditions.
One of the key issues in the run-up to the meeting was the production quotas set for Angola and Nigeria earlier this year. These countries were not happy with their goal of lower production for next year. Following an independent assessment of what these countries would be able to produce next year, Nigeria’s production target was raised from 1.38 million barrels/day to 1.5 million barrels/day. However, Angola’s target was further reduced from 1.28MMbbls/d to 1.11MMbbls/d. Angola has said it will not follow its new quota and will pump at 1.18 million barrels per day starting in January.