OPEC+ is expected to agree on Sunday to extend its significant oil output cuts into 2024, and possibly 2025, according to two OPEC+ sources. The decision aims to stabilize the market in the face of weak global demand growth, high interest rates, and increasing U.S. production.

Currently, oil prices hover around $80 per barrel, which is below the threshold many OPEC+ members require to balance their budgets. Concerns about slow demand growth in China, the world’s largest oil importer, have pressured prices. Consequently, oil market analysts anticipate OPEC+ will extend the cuts to balance supply and demand.

The Organization of the Petroleum Exporting Countries and its allies, including Russia, collectively known as OPEC+, have implemented a series of deep output cuts since late 2022. At present, OPEC+ members are reducing output by a total of 5.86 million barrels per day (bpd), representing about 5.7% of global demand. This includes 3.66 million bpd in cuts valid through the end of 2024 and an additional 2.2 million bpd in voluntary cuts by some members, set to expire at the end of June.

On Sunday, OPEC+ is expected to decide on extending some or all of the current 3.66 million barrels per day (bpd) cuts into 2025, along with the potential extension of the 2.2 million bpd voluntary cuts into the third or fourth quarter of 2024, according to two sources.

Countries that have implemented voluntary cuts exceeding those agreed upon by the wider group include Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia, and the United Arab Emirates.

OPEC+ will hold a series of meetings both online and in person on Sunday. The sessions began around 0930 GMT with a meeting of OPEC ministers only. Key ministers, primarily from countries with voluntary cuts, have traveled to Riyadh, Saudi Arabia’s capital, while others will participate online.