<article><p class="lead">Saudi Arabia today said it will make a 1mn b/d voluntary crude output cut in February and March. </p><p>The cut is on top of Saudi Arabia's output commitment of 9.119mn b/d under the latest Opec+ agreement and will mean it will produce as little as 8.119mn b/d from the start of February, its energy minister Prince Abdulaziz bin Salman said. Saudi Arabia produced around 8.96mn b/d in November, according to most recent <i>Argus</i> estimates.</p><p>The announcement came at the end of a two-day Opec+ meeting, in which the alliance agreed to increase official collective crude production quotas by 75,000 b/d in February and another 75,000 b/d in March, split between Russia and Kazakhstan. Remaining members will see their existing January quotas unchanged for the coming two months.</p><p>Russia and Kazakhstan will see their respective production quotas rise by 65,000 b/d and 10,000 b/d each month, to 9.184mn b/d and 1.427mn b/d in February and to 9.249mn b/d and 1.437mn b/d in March. The rise represents half of their monthly quota increase for January. They were granted the increase because their domestic consumption rises in winter, Iran's oil minister Bijan Namdar Zanganeh said after today's meeting. </p><p>This means Opec+ members that participate in the production restraint deal will target an official quota of 34.975mn b/d in February and 35.05mn b/d in March, representing a cut of around 7.125mn b/d and 7.05mn b/d in the respective months, largely from October 2018 baselines. </p><p>Saudi Arabia's voluntary cuts will bring the unofficial production around 1mn b/d lower.</p><p>The new agreement means the Opec+ alliance will not convene next month, although there will be a meeting of the Joint Ministerial Monitoring Committee (JMMC), which monitors compliance, on 3 February and 3 March. The next Opec+ meeting will take place on 4 March. The group had planned to meet each month to determine production levels for February, March and April.</p><p>Today's agreement <a href="https://direct.argusmedia.com/newsandanalysis/article/2174092">marks a compromise</a> between the majority of the Opec+ group, which favoured rolling over existing quotas into February, and a Russia-Kazakhstan proposal to increase collective production ceilings by 500,000 b/d next month.</p><p>Russia and Kazakhstan focused on market share, while others in the group placed more importance on oil prices, Iran's Zanganeh said on his exit from yesterday's meeting, which reached an impasse as Russia showed few signs of budging on its demands.</p><p>"[Saudi Arabia's voluntary cut] will help to faster stabilise the oil market," Russia's deputy prime minister Alexander Novak said today.</p><p>Opec+ members have been hesitant to raise production given prevailing market conditions. Recent positive developments around the roll-out of Covid-19 vaccines in many countries have spurred optimism about a demand recovery. But the emergence of more infectious strains of the virus in Europe and elsewhere have triggered new travel restrictions and lockdowns including in parts of the UK yesterday.</p><p>Opec+ today recommended keeping the 2015-19 period as the basis for the latest five-year average of OECD commercial oil stock levels, saying 2020 as an "exceptional year" would distort the figures.</p><p class="bylines">By Rowena Edwards, Nader Itayim and Ruxandra Iordache </p></article>
