- Algeria allocates $3.5 billion to support exploration and to increase the size of hydrocarbon reserves
- Qatar Energy to add another 2 gigawatts to its installed solar capacity
- Indian Oil Corporation signs second agreement with Ruwais LNG
- The Iraqi government is unable to reduce production from Iraqi Kurdistan to be in line with OPEC+ decisions
- Saudi Arabia's oil export revenues to fall in 2024 due to repeated voluntary production cuts
- ASRY Awarded 2024 RoSPA Gold Medal in Health and Safety
- BP ponders shifting focus away from renewables, say sources
- QatarEnergy enters 10-year naphtha supply agreement with Japan’s ENEOS Corporation
- The International Energy Agency expects oil demand growth to slow in 2024
- The International Monetary Fund re-selects Kristalina Georgieva as its director
Saudi Arabia's oil export revenues to fall in 2024 due to repeated voluntary production cuts
Saudi Arabia’s oil export revenues are estimated to decline by about $1 billion in 2024 due to repeated voluntary production cuts with no significant improvement in oil prices.
For more than a year, and as part of a plan by the OPEC+ alliance, Saudi Arabia has been committed to deep cuts in its production and exports. These cuts have led to the Kingdom and perhaps the group as a whole losing a significant share of the global oil market.
The Kingdom recently agreed to extend voluntary production cuts by one million barrels per day until the end of November 2024, so the Kingdom’s crude oil production in 2024 is estimated at about 9 million barrels per day, which is the lowest rate since 2010, and is also lower than the rate of 9.12 million barrels per day for 2021, in which production was affected by the outbreak of the Covid pandemic.
It is worth noting that the voluntary cuts through the OPEC+ alliance did not achieve significant gains for the alliance in supporting prices, in addition to their loss of a large share of the global oil market in favor of producers from outside the group, especially the United States, whose exports replaced OPEC exports.
Therefore, it is not unlikely now that the Kingdom of Saudi Arabia and its allies in the OPEC+ group will move to reduce restrictions imposed on production rates during the remaining months of 2024. This trend will increase the quantities produced and exported by them to the global oil market, and thus increase their share in the market.
In an attempt to regain some of the lost market share, eight countries (Saudi Arabia and seven other OPEC+ members) known as the G8 are scheduled to begin easing their voluntary cuts of 2.2 million barrels per day starting in October 2024.
However, some observers believe that easing production restrictions by pumping more crude oil into the markets may not achieve positive results for the OPEC alliance in light of the current market instability, slowing demand and increasing supply from both OPEC and non-OPEC in the fourth quarter of 2024, as well as with the expected continued fragility of the markets in 2025 as well.
