MOSCOW, November 27. /TASS/. The decision to extend voluntary oil production cuts by OPEC+ nations could lead to strife inside the alliance, experts polled by TASS said.
Eight OPEC+ nations, including Russia and Saudi Arabia, have voluntarily chosen to reduce oil production by 2.2 mln barrels per day since Q1 2024. These countries planned to start ramping up output gradually starting in October 2024, but this increase has been postponed until the end of 2024.
OPEC+’s June decision to gradually increase output starting in October helped the alliance avoid an open crisis amid a whole host of countries growing restless with the production cuts, Alexey Belogoryev, research director of the Institute for Energy and Finance Foundation, said. "Subsequent decisions to push back the start of this increase undoubtedly create tension and could potentially lead to a loss of discipline regarding quota compliance," he said.
Head of the analytical center of the European broker Mind Money Igor Isayev also admitted that keeping the OPEC+ voluntary oil production cuts in place through next year could be a source of division among members. The world has an excess supply of energy right now, which may fuel these conflicts, he stressed. OPEC+ countries have notable spare oil production capacities, the expert noted, adding that they can ensure an increase in oil production by 5-10 mln barrels per day within 3-6 months without extra investments.
Currently, oil prices are balanced and sufficient to generate good revenue for producing countries, especially Arab countries, he said. "They are regulating production to keep prices at a comfortable level, compensating for reduced sales volumes with higher prices. However, if oil prices begin to drop sharply, resources to cover budgetary needs may not be sufficient, leading to intense competition," Isayev concluded.