OPEC+ Announces "Voluntary Additional Production Cuts"... International Oil Prices Fall Instead

"Voluntary Additional Cut of 2.2 Million Barrels per Day"
Angola and Others Oppose... No Binding Force on Cuts

The OPEC+ coalition of major oil-producing countries announced an agreement on voluntary additional production cuts, but controversy is growing as some member countries, including Angola, which opposed the additional cuts, have rejected the reduction plan and stated their intention to maintain production levels. With analyses suggesting that member countries will not actively participate in the non-binding voluntary cuts, international oil prices actually closed lower. Oil price volatility is expected to increase further in the future.

[Image source=Reuters Yonhap News]

According to Bloomberg on the 30th (local time), OPEC+ held a ministerial meeting online to decide on oil production levels. Immediately after the meeting, OPEC+ issued a statement saying, "Some countries have announced voluntary cuts amounting to an additional 2.2 million barrels per day," and "the voluntary cuts will be gradually reduced depending on market conditions."

Although it was announced that there would be an additional voluntary cut of about 1.2 million barrels on top of the existing 1 million barrel cut planned until the end of this year, international oil prices actually fell further. West Texas Intermediate (WTI) crude oil in the U.S. closed at $75.96 per barrel, down 2.4% from the previous session, and North Sea Brent crude also closed down 0.3% at $82.83 per barrel.

This is because the current cut plan is a non-binding voluntary reduction, and with countries publicly opposing additional cuts, the likelihood of compliance has diminished. Previously, African countries such as Angola, which opposed the cut plan, repeatedly emphasized their intention to maintain current production levels and not accept the additional cuts.

Additionally, Brazil, which has expressed its desire to join OPEC+, announced it will join starting next year, meaning Brazilian oil is not included in this additional cut plan, further contributing to the decline in oil prices. Brazil produces about 3.8 million barrels of oil per day, and there have been concerns that if Brazil immediately joins OPEC+ and participates in additional cuts, oil prices would rise significantly.