Major Oil Producers Recommend Maintaining Current Output Strategy
VIENNA, Austria – A committee of major oil producers has recommended keeping the cartel’s current output strategy unchanged. This decision comes after Saudi Arabia and Russia extended their cuts despite recovering prices.
Oil prices have been on an upward trend in recent months due to high demand and tighter supply. Brent crude reached $85 a barrel, its highest level in over three months.
The committee, known as the Joint Ministerial Monitoring Committee (JMMC), met virtually on Friday and reaffirmed its commitment to the production reduction strategy, which will extend until the end of 2024. The committee also expressed its appreciation for Saudi Arabia’s additional voluntary cut of one million barrels per day (bpd), which the country extended until September. Russia announced a further cut of 300,000 bpd for September.
Since the invasion of Ukraine by Russia in February 2022, oil prices peaked at over $130 per barrel.
The JMMC is optimistic about the impact of supply cuts and the recovery of oil prices, despite concerns about the global economy. However, Saudi Arabia is expected to gradually withdraw its voluntary cut in the coming months to avoid revenue shortfalls and dampening economic growth.
The next JMMC meeting is set for October 4, and the next ministerial meeting for November 26. The JMMC has no decision-making power but plays an important role in discussing market conditions and making recommendations for formal discussion and decision at ministerial meetings.
