- After lengthy negotiations within OPEC+, Saudi Arabia has announced a surprising and significant measure. The country's Energy Minister, Prince Abdulaziz bin Salman, revealed that Saudi Arabia will voluntarily reduce its daily oil production by an additional 1 million barrels. This decision stands as the most crucial aspect of the agreement reached, which also involves an extension of voluntary cuts until 2024.
- The United Arab Emirates emerges as the primary beneficiary of the weekend's discussions, as it receives an increase in its quota for the upcoming year. Unfortunately, African members were requested to surrender a portion of their unused quota, despite struggling to meet their targets. This decision has proven to be a difficult political burden for them to accept. Consequently, the negotiations were prolonged, with late-night sessions taking place in Vienna hotels.
Why it matters
OPEC+ reached an agreement that appears to cut output in 2024, but it will actually have the opposite effect. Saudi Arabia will further reduce its output by 1 million barrels per day in July. Other OPEC members and non-OPEC allies will accept lower output targets based on their actual production capacities. The United Arab Emirates' target will increase by 200,000 barrels per day.
