OPEC+ has extended its oil supply cuts until mid-year to avoid a global surplus and support prices. The restrictions, totalling around 2 million barrels per day, will remain in place until the end of June. Russia has pledged to bolster its role by focusing more on production cuts than on exports.

Investors had anticipated the extension, seeing it necessary to offset a seasonal lull in global fuel consumption and the soaring production from several OPEC+ rivals, notably U.S. shale drillers. Uncertain economic outlooks in China reinforce the need for caution.

Abundant supplies have anchored the international oil price near $80 per barrel this year, even as conflict in the Middle East disrupts regional maritime transport. Riyadh needs a crude price above $90 per barrel to offset its massive investments in economic transformation, including futuristic cities and sports tournaments, according to Fitch Ratings. Its primary partner within the alliance, Russia, is also seeking revenue to continue its war against Ukraine.

Russia, benefiting from a unique exemption allowing it to split its restrictions between crude oil production and exports of refined products, will focus more on reducing crude output over the next quarter, said Deputy Prime Minister Alexander Novak. This pledge could bring some satisfaction to Riyadh. Saudi Energy Minister Prince Abdulaziz bin Salman had expressed disappointment last year that Moscow had not agreed to cut its production, which would have had a more direct impact on global market balances than changes in exports.

It must be said that Russia and other group members still need to honour their commitments fully. Moscow only recently fully implemented the production cuts it had promised nearly a year ago. In January, the nation reduced its crude oil exports, as agreed, by about 300,000 barrels per day, but the limits on promised shipments of refined fuels were less clear. Iraq and Kazakhstan collectively pumped several hundred thousand barrels per day above their quotas in January but pledged to improve compliance and even compensate for any initial overproduction. Forecasts from the International Energy Agency in Paris suggest that with the slowdown in global oil demand growth and increased supply from the Americas, OPEC+ must persist in its yearly cuts.