OPEC+ is about to have a new member, OPEC is determined to support oil prices

On November 30, the Organization of the Petroleum Exporting Countries (OPEC) announced that Brazil will join the OPEC+ alliance (including OPEC countries and partners) in early 2024.

OPEC decides to cut production further in 2024. (Source: Reuters)

In a statement, OPEC said Brazilian Mines and Energy Minister Alexandre Silveira de Oliveira participated in the 36th OPEC+ ministerial meeting held online.

OPEC hopes that Brazil's joining OPEC+ will help increase the bloc's influence and position in the world oil market.

Brazil is currently the largest oil producer in South America and among the top 10 crude oil producers in the world.

According to the “World Oil Market Outlook 2023” report published last October, Brazil currently produces about 3.2 million barrels of crude oil per day and its crude oil production in the medium term is expected to increase sharply.

* Also on November 30, OPEC decided to further cut production in 2024 to support the recent decline in oil prices, amid a gloomy global economic picture.

The organization said in a statement that the OPEC Secretariat “took note of the announcement” by several OPEC+ countries that they would cut oil production by a total of 2.2 million barrels per day in the first quarter of 2024, aiming to support “oil market stability and balance.”

The production cuts will be implemented based on the quotas agreed at the most recent OPEC+ ministerial meeting in June this year.

The move will add to voluntary production cuts announced by OPEC+ countries in April and will last until the end of 2024, the OPEC statement said.

Specifically, Saudi Arabia will extend its voluntary production cut of 1 million barrels per day, effective from July this year, until the end of the first quarter of 2024.

Meanwhile, Russia will further cut oil exports from the current level of 300,000 barrels per day to 500,000 barrels per day, until March 2024.

Other OPEC+ countries, including Iraq, the United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria and Oman, pledged smaller production cuts in the first quarter of 2024.

However, the statement noted that the new production cuts would be “adjusted gradually depending on market conditions” to “support market stability” after March 2024.

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