The Japanese Petroleum Association expects an extension of the oil supply cuts from OPEC+

The head of the Japan Petroleum Industry Association said on Monday that he expects OPEC+ to extend supply cuts beyond December to support oil prices.

Three OPEC+ sources told Reuters that the alliance is scheduled to study whether to impose additional oil cuts when it meets on November 26, after crude prices fell by about 20 percent since late September. The OPEC+ alliance consists of the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia.

“At the very least, the current production cuts are likely to continue,” Shunichi Kito, head of the Japan Petroleum Industry Association, said in a press conference, including additional production cuts from Saudi Arabia and Russia, noting that Saudi Arabia wants to keep oil prices above $80 a barrel.

He added, “We do not know whether deeper production cuts will be imposed.”

Saudi Arabia, Russia and other OPEC+ members pledged that the total oil production cut would be 5.16 million barrels per day, or about five percent of total global oil demand, in a series of steps that began in late 2022. The cuts include 3.66 million barrels per day by OPEC+. Additional voluntary cuts from Saudi Arabia and Russia.

Kitto stated that the Union expects Dubai oil prices to remain in a range between $80 and $95 per barrel next month. Keto also serves as president of the Idemitsu Kosan Oil Refinery.

When asked about the Yemeni Houthi group’s seizure of a ship in the Red Sea, Kitto said that this had no direct impact on oil supplies to Japan, supplies of which 95 percent depend on imports of crude oil from the Middle East.