OPEC+ stretches production cuts into 2025 but presents timeline to ease off oil curbs later on

With geopolitical challenges and economic uncertainties at the forefront, the Organization of Petroleum Exporting Countries (OPEC) and participating non-OPEC oil-producing countries (OPEC+) have struck a deal to prolong their production cuts into 2025 to prop up oil markets. This time OPEC+ also provided a timeframe to taper off these output cuts.


Following voluntary cuts in April 2023 and November 2023, OPEC+ countries have agreed to reinforce what they describe as “precautionary efforts” aimed at supporting the stability and balance of oil markets with additional oil output curbs.

Therefore, Saudi Arabia, Russia, Iraq, United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria, and Oman made up their minds to extend the additional voluntary cuts of 1.65 million barrels per day – announced in April 2023 – until the end of December 2025.

At a meeting, held in Riyadh on the sideline of the 37th OPEC and non-OPEC Ministerial Meeting (ONOMM), these countries disclosed plans to widen their additional voluntary cuts of 2.2 million barrels per day, which were announced in November 2023, until the end of September 2024.

Afterward, these 2.2 million barrels per day curbs are expected to be gradually phased out on a monthly basis until the end of September 2025 to bolster market stability. However, OPEC+ highlighted that the monthly increase could be paused or reversed subject to market conditions.

Layers of OPEC+ cuts; Source: Amena Bakr/X

While the ongoing tensions in the Middle East have the potential to push oil prices up, Brent crude prices have been around $80 a barrel lately and have not experienced another significant surge since April 2024, when Israel’s attack on Iran’s embassy in Damascus, Syria, put oil markets on tenterhooks. Brent traded at $82 a barrel on May 31.

Goldman Sachs describes the meeting between the permanent intergovernmental organization of 12 oil-exporting developing nations and participating non-OPEC oil-producing countries as bearish because eight OPEC+ countries already signaled intention to gradually phase out the 2.2 mb/d of extra voluntary curbs over Q4 2024-Q3 2025, despite recent upside surprises to inventories.

Even though OPEC+ extended all three layers of production cuts with 2 mb/d of group curbs through 2025, 1.66 mb/d of voluntary cuts through 2025, and 2.2 mb/d of extra voluntary curbs through Q3 2024, the investment banking, securities, and investment management firm points out that the detailed default plan to unwind extra cuts makes it harder to maintain low production if the market turns out softer than bullish OPEC expectations.

Production levels; Source: OPEC

Goldman Sachs concluded: The communication of a gradual unwind reflects a strong desire to bring back production of several members given high spare capacity. High spare capacity was also the key driver of our above-consensus 37% model prediction that a production increase would be announced.

“As a result of the bearish meeting, and given recent upside surprises to inventories, we now see the risks to our $75-90 range for Brent as skewed to the downside.”