OPEC+ agreed in an online meeting on Sunday (June 2) to extend current production cuts until 2025 in a bid to support international oil prices amid sluggish demand growth, high interest rates and rising output from rival United States.

Oil Union + extended production cuts until the end of next year to support international oil prices

In a statement after the meeting, the Union agreed to extend the 3.66 million barrels per day production cut by one year until the end of 2025, and extend the 2.2 million barrels per day production cut by three months until the end of September this year. Members of the bloc currently cut production by 5.86 million barrels per day, or about 5.7 percent of global demand.

Three EU + sources said the bloc would phase out the 2.2 million BPD cut over a year, starting in October 2024 and running until the end of September 2025.

However, many analysts had also predicted that the organisation would struggle to set a 2025 target because it had yet to agree on capacity targets for each member, an issue that has previously sparked tensions.

In a surprise move, UNOM + postponed capacity discussions from this year to November 2025 and agreed to a new production target for the United Arab Emirates, allowing it to gradually ramp up production from its current 2.9 million barrels a day to a rate of 300,000 barrels a day.

The voluntary cuts include Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates.

Amrita Sen, co-founder of Energy Aspects, said: "With demand concerns still prevalent, this agreement should ease market concerns about oil Plus increasing production."

She added that the deal would ease concerns that Saudi Arabia was ramping up oil production again as a result of Aramco's listing.