Major oil-producing nations Saudi Arabia and Russia on Thursday announced they would further slash production in an effort to prop up volatile prices following an Opec+ meeting.
The meeting also saw major producer Brazil declared as joining the grouping from next year, according to a statement by the Organization of the Petroleum Exporting Countries (OPEC).
Brazil’s Energy Minister Alexandre Silveira, who attended the meeting, called it a “historic moment for Brazil”, but added his ministry still needed to study “in detail” the invitation to join the group.
Following the virtual meeting of ministers from the 23-member Opec+ alliance, Riyadh announced it would extend its voluntary oil production cut of one million barrels per day until March 2024.
Moscow said it would slash oil exports by 500,000 barrels a day — up from 300,000 barrels a day so far — until March, following tough, hours-long talks.
Other countries, such as the UAE, Kuwait, Kazakhstan, Algeria and Oman, will also make cuts, according to the Bloomberg news agency.
Amid stuttering global economic growth, analysts had largely expected Opec+ producers to extend or deepen production cuts into next year to halt the recent slump in prices.
Around 1730 GMT, the price of Brent, the European benchmark for crude, fell by 0.31 per cent to $82.84 per barrel, while that of WTI, its American equivalent, dropped by 2.47 per cent to $75.94 despite the announcements.
Intense negotiations have continued in recent days as Saudi Arabia, which has borne the brunt of the supply cuts, sought to convince African countries to chip in by accepting lower production quotas.
But Angola and Nigeria were among those countries reluctant to sign up, seeking to step up production to secure vital foreign currency after they agreed in June to reduce their quotas.
Since the end of 2022, the alliance has implemented supply cuts of about five million barrels per day (bpd).
In a boost to the grouping, Opec said Brazil would join from next year. Brazil is among the world’s top 10 producers and has been the largest oil producer in Latin America since 2016.
But investors have warned that cutting production might not be enough to prevent prices from plummeting.
Oil prices are far from the near-$140 a barrel peak reached after the Ukraine crisis.
But they remain above the average of the last five years, currently hovering at around $80 per barrel after nearly striking $100 in September.
Concerns among producers persist about demand softening owing to slowing economies, particularly China’s — the world’s biggest importer of crude — amid mixed signals emerging from Europe and the United States.
On the supply side, crude production in the US and Brazil reached record levels, triggering what some analysts called a shift in the balance of power.