OPEC members and allied oil producers, the so-called OPEC+, have decided to reduce their crude oil production by an additional 500,000 bbl/d as of 1 January 2020, in order to avoid oversupply and to raise prices. This decision adds to a previous agreement to cut production by 1.2 mb/d (December 2018). Moreover, Saudi Arabia has announced that it would continue to exceed its quota by 400,000 bbl/d, leading to a total production cut of 2.1 mb/d. Russia has agreed to a quota of 300,000 bbl/d during the first three months of 2020, excluding gas condensate production.
In December 2018, OPEC+ agreed to jointly reduce crude oil production by 1.2 mb/d, effective as of January 2019 for an initial period of six months, in an attempt to strengthen global oil prices. The produciton cuts are shared among OPEC countries (0.8 mb/d, Iran, Libya and Venezuela being exempted) and non-OPEC countries such as Russia (0.4 mb/d). Most of the actual reduction in OPEC's production comes from production losses in Iran and Venezuela. In July 2019, the parties decided to extend voluntary production adjustments for an additional period of nine months, from 1 July 2019 to 31 March 2020.
The December 2019 agreement doesn't specify any duration but the OPEC countries are expected to meet again in early March 2020. The effects of the agreement on global crude oil production may be limited as non-OPEC countries such as the United States, Canada, or Norway are continuing to raise their production. In addition, some OPEC members such as Iraq or Nigeria are over-producing (Iraq is exempted from the quota).