Eight Opec+ members that were due to begin raising crude output from December have opted to delay the restart by one month, the Opec secretariat said today, 3 November.
The eight ꟷ Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman ꟷ had already postponed, by two months, a plan to start returning supply, over concerns about worsening economic indicators, and in turn, weakening oil prices.
With these concerns still very much live, the group has decided again to delay the start of a move that would have added 180,000 b/d to global supply in December.
The eight "have agreed to extend the November 2023 voluntary production adjustments of 2.2mn b/d for one month until the end of December 2024," the Opec secretariat said.
As was the case with the postponement in September, the secretariat did not give any explicit rationale for the move.
This one month deferral means a decision about whether to start returning supply in January, or to delay again, will coincide with Opec and Opec+ group meetings that are scheduled to take place in early December.
Delegate sources told Argus after the first postponement that its decision was also to allow some of the group's serial overproducers, namely Iraq, Russia and Kazakhstan, time to improve compliance with their pledged output targets. The secretariat today again made a point of underlining the wider group's "collective commitment to achieve full conformity," with a focus on those three countries.
Benchmark North Sea Dated crude was assessed by Argus at $73.48/bl on Friday, 1 November, around $20/bl below where it was before Opec+ announced its initial output cut in October 2022. The alliance has reduced output by 4mn b/d since then, Argus estimates.
Much of the oil price weakness is down to an increasingly gloomy demand outlook, primarily driven by worse-than-expected consumption growth in China. Global oil supply is also higher than Opec+ would prefer — including from its own overproducers — and is due to rise further, with the US, Guyana and Canada driving gains. The IEA forecasts a supply surplus of more than 1mn b/d in 2025, even in the absence of any increase from Opec+.
