OPEC+ members, led by Saudi Arabia and Russia, have announced the extension of voluntary cuts to oil production for an additional three months, aiming to bolster oil prices amidst ongoing geopolitical tensions. The decision, revealed by Saudi Arabia’s state news agency, will see the curbs maintained until the end of June, prolonging measures that have been in place since 2022.

These measures are part of a broader strategy to support prices, as the combined production targets of OPEC+ members have been reduced by approximately 2.2 million barrels a day since the initiation of the latest voluntary cuts in January. The move comes in response to escalating US production and lackluster global demand, factors that have exerted downward pressure on oil prices.

Despite recent geopolitical turmoil in the Middle East, including the Israel-Hamas conflict and attacks on commercial shipping by the Houthis, oil prices have remained well below the $100 per barrel mark observed in the summer of 2022. The decision to extend the production cuts was widely anticipated by traders, with crude oil prices experiencing an uptick in the lead-up to the announcement. Brent crude, the international benchmark, rose by over 2% last week to close above $83 a barrel, while WTI closed just under $80 a barrel, marking a rise of more than 4%.

Amrita Sen, an analyst at Energy Aspects, noted that OPEC+ is focused on maintaining market stability, despite the recent price increases. Saudi Arabia has been at the forefront of the production cuts, reducing its output by 1 million barrels per day since July. In a significant policy reversal, the kingdom also abandoned its plans to expand daily oil production capacity by 2027 in January, signaling a shift in its approach.