The Director of the International Energy Agency, Fatih Birol, said, on Monday, that the agreement of the OPEC + alliance to implement production cuts during the year 2024, preceded by a voluntary Saudi cut in next July, will raise oil prices globally.

Birol said at a conference of heads of airlines around the world in Istanbul, that the OPEC + decision to extend cuts by 1.4 million barrels per day until the end of 2024 will likely lead to higher prices.

However, the Director of the Energy Agency emphasized that the world needed to balance Chinese demand, which was the main source of uncertainty for the markets at the moment.

Crude oil prices are falling below the expectations of major oil producers, amounting to $90 on average, amid slowing economic growth in China, which classified as the largest importer of crude in the world, with more than 12 million barrels per day.

For a period of one month, which can be extended, Saudi Arabia announced on Sunday, to reduce its crude production by one million barrels per day, in addition to its current cuts.

“With the expectation of an increase in oil prices and a tightening of the balance of supply and demand in the second half of 2023, this decision will be another factor that may lead to an increase in prices further,” Birol said.

The OPEC + alliance announced on Sunday, that it had decided to compulsorily reduce its production of crude oil, by 1.4 million barrels per day, during the next year, from the levels of October 2022.

The OPEC + stated in a statement, that the level of total crude oil production for the member states of OPEC.

The OPEC + will reach 40.46 million barrels per day, from the beginning of next year until its end, instead of 41.86 million barrels per day at the end of October.

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