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Members of the OPEC+ group agreed on Sunday to cut oil outputs to 40.463 million barrels per day throughout 2024, the group said in a statement after a meeting in Vienna.

"The Participating Countries decided to… [a]djust the level of overall crude oil production for OPEC and non-OPEC Participating Countries in the [Declaration of Cooperation] to 40.46 mb/d, starting 1 January 2024 until 31 December 2024," the group said joint statement.  

Reiterating previous commitment to make decisions that seem fit for the oil market, the world's largest oil powers said that OPEC and non-OPEC members aim to "achieve and sustain a stable oil market, and to provide long-term guidance for the market," that is "in line with the successful approach of being precautious, proactive, and pre-emptive, which has been consistently adopted," by the group.

Read more: Oil overshadows dollar in light of market turbulence

Saudi Arabia announced a one million BDP production cut, while Saudi Energy Minister Prince Abdulaziz bin Salman noted that the slash in output would be for July but "can be extended".

“This is a grand day for us, because the quality of the agreement is unprecedented,” he told reporters, adding that the revised production targets are “much more transparent and much more fair.”

The Saudi reduction is a “lollipop,” the energy minister said, “We wanted to ice the cake.” 

The group “will do whatever is necessary to bring stability to this market," he concluded.

According to Suhail Mohamed Al Mazrouei, the energy minister, the United Arab Emirates will continue to lower its oil production by 144,000 barrels per day voluntarily through the end of 2024.

Meanwhile, Russia adopted a 650,000 bpd reduction in output, down to 9.828 million barrels, starting January 2024, while lowering the current target, along with both Nigeria and Angola.

"This level was the required production level for the month of February 2023, as assessed by the average of the secondary sources, and is subject to revision by June 2023 as the country [Russia] is currently working with the secondary sources to update production figures," the statement read.  

The 36th OPEC and non-OPEC Ministerial Meeting will take place in Vienna on Sunday 26 November 2023.

Read more: OPEC to welcome Iran’s return to oil market when sanctions lifted

Hit the mark

Washington has been planning on replenishing the US Strategic Petroleum Reserve SPR while aiming at lower oil prices during this year if it is "advantageous to taxpayers," US Energy Secretary Jennifer Granholm stated in April.

Biden's administration planned on refilling the reserves when oil prices were between $67-$72 a barrel, which was reached back in March, but as soon as the mark hit the desired price, OPEC+ announced a surprise further production cut, sending prices $5 higher per barrel.

The expected cut comes just after WTI crude oil fell $72 in May, which raised concerns in Washington of further output cuts that would prevent the United States from refilling its SPR within its targeted prices.