look news india
The Organization of Petroleum Exporting Countries (OPEC Plus) has announced to extend its significant oil production cuts till 2025. The decision is aimed at stabilizing the market amid sluggish demand growth, high interest rates and rising US oil production. Under the decision, the group will maintain a production cut of 58.6 lakh barrels per day. After this, the cuts will be phased out. The decision to maintain a long-term cut in production signals OPEC Plus' determination to stabilize the market.
Currently, OPEC Plus is cutting 58.6 lakh barrels per day. The scale of this cut is 5.7 percent of global demand. This cut also includes a mandatory cut of 36.6 lakh barrels per day. The cut was to end at the end of 2024. While the cut of 58.6 lakh barrels also includes a voluntary cut of 22 lakh barrels per day by eight members of OPEC. Which was earlier scheduled to end in June 2024. Now in Navasar's decision, the cut of 36.6 lakh barrels per day has been extended till the end of 2025. Meanwhile, the cut of 22 lakh barrels per day has been extended till September 2024. After this time, the cut will be phased out from October 2024 to September 2025.
Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said OPEC has adopted a strategy of waiting for economic conditions to improve before revising its production outlook. In particular, OPEC Plus is waiting for interest rates to be lower. Also, OPEC Plus believes that consistent growth globally rather than different growth figures from different countries is conducive to a stable environment in the market.
Along with this, OPEC estimates that after the completion of the first six months of 2024, the average daily demand for crude oil will be 436.5 lakh barrels during the remaining six months.
