Several OPEC+ countries, including Saudi Arabia and Russia, agreed on Thursday to extend oil supply cuts. for three months until March to avoid a sharp drop in prices on a global market flooded with crude.

The decision was widely expected, although disagreements that delayed the meeting for a few days raised doubts whether the oil cartel would maintain the cuts.

Eight OPEC+ countries will extend their “voluntary adjustments” of 2.2 million barrels per day until the end of March, the Vienna-based group said in a statement after a virtual meeting.

Thereafter, these reductions “will be phased out” on a monthly basis until the end of September 2026, the group said, adding that this was “subject to market conditions”.

Without a new agreement, the eight countries were to start increasing production from January to gradually bring it back to 2023 levels.

Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates have already twice postponed production increases which were due to start in October and then in December.

– “Saves time” –

Supply cuts are having only a muted impact on the market, with US President-elect Donald Trump expected to enact policies to boost US oil production, while China’s demand outlook is lackluster as its economy languishes.

Thursday’s move “buys the group time,” said David Oxley, chief climate and commodities economist at research group Capital Economics.

“The backdrop of weak global oil demand means it could easily find itself in a similar position within three months,” Oxley said.

“In our view, oil price fundamentals remain weak.”

The International Energy Agency said last month that even if OPEC+ cuts remained in effect, global supply would exceed demand by more than 1 million barrels per day next year.

OPEC+ countries are currently withholding six million barrels of oil per day, including the 2.2 million barrels per day of production they planned to put back on the market.

On Thursday, the cartel decided to extend two other tranches of reductions for another year, until the end of 2026, the group said.

Analysts at DNB bank said before the meeting that “there is no room for additional OPEC+ oil in 2025” in the market and that an increase in production would lower crude prices.

This would displease Saudi Arabia, which relies on high oil prices to finance its efforts to diversify its economy.

While Saudi Arabia and Russia dominate OPEC+, other countries would like to increase production, notably Kazakhstan and the United Arab Emirates, and “have a lot of spare capacity”, according to Jorge Leon, analyst at Rystad Energy.

Production limits are only effective if they are respected, and earlier this year the cartel denounced Iraq and Kazakhstan for exceeding their quotas.

In June, the United Arab Emirates secured an additional quota of 300,000 barrels per day in 2025, increasing tensions with other countries seeking to increase production.