OPEC+ delays the unwind: two more months of voluntary cuts and the compliance test
On 5 September 2024 eight OPEC+ producers chose delay over delivery. The countries that had announced additional voluntary cuts in April and November 2023, namely Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman, held a virtual meeting and extended those additional voluntary production cuts of 2.2 million barrels per day for two months until the end of November 2024. The OPEC statement is unambiguous on the next step: after that extension, the cuts are to be gradually phased out on a monthly basis starting 1 December 2024, according to an attached schedule, with the flexibility to pause or reverse the adjustments as necessary.
The National, reporting the same day, noted that the eight will pause scheduled increases of 180,000 barrels per day that had been lined up for October and November. The June 2024 architecture of deep OPEC+ restraint therefore remains intact into late autumn; only the calendar of the first voluntary unwind has moved. The National recorded Brent trading at 72.51 dollars per barrel and West Texas Intermediate at 68.93 dollars per barrel on the evening of the announcement in UAE time, after crude prices had hit their lowest in nine months earlier in the week.
The OPEC release states that Iraq and Kazakhstan have overproduced since January 2024, yet have strongly reaffirmed commitment to the agreement and to compensation schedules submitted to the OPEC Secretariat under the 53rd Joint Ministerial Monitoring Committee meeting of 3 April 2024. Readers who only watch the 2.2 million barrel per day figure miss the stacking that still matters. Reuters, covering the 2 June 2024 ministerial outcome, put contemporaneous total OPEC+ cutting at 5.86 million barrels per day, about 5.7 percent of global demand, of which 3.66 million barrels per day were the cuts then due for end-2024 and later extended through 2025, and 2.2 million barrels per day were the voluntary tranche by eight members.
From a balance-sheet view, the call on OPEC+ still depends on non-OPEC growth and on Chinese apparent demand, not only on Vienna's arithmetic. The IEA's later Global Energy Review would show Chinese oil use rising only 0.8 percent in 2024 after an 8.7 percent surge in 2023. For importing economies, including those in South Asia that buy on the water, the September delay is another attempt at a near-term price floor. Spare capacity and chokepoint risk still share a risk register with voluntary cuts.
The Red Sea disruption that began in late 2023 illustrated how freight and insurance can move landed costs without a classic Gulf production outage. Fiscal politics inside producer states also shape how long voluntary cuts can last.