(NewsNation) — A group of the world's largest oil producers recently agreed to extend production cuts until next year in order to support the price of the valuable oil.

The OPEC+ alliance, which includes countries such as Saudi Arabia and Russia, decided on Sunday to maintain most of its oil production cuts until 2025 amid concerns about falling demand.

Even with the War between Israel and HamasThe price of Brent crude, the international oil benchmark, has hovered around $80 a barrel over the past month, still below the price seen in June 2022, when prices rose above $100 a barrel.

The plan to further restrict supplies is intended to benefit the Saudis and Russians, which could come at the expense of American motorists. However, seasonal factors could have a greater impact on gasoline prices in the short term.

Here's what you need to know and how likely you are to see higher gas prices.

What is OPEC and what does it do?

The Organization of Petroleum Exporting Countries (OPEC) is an association of some of the world's largest the most oil-rich countries including Saudi Arabia, Iraq, Iran and Venezuela.

Together, these nations function like a cartel, meeting regularly to coordinate oil production and thus control world market prices for the entire group.

In 2016 signed an agreement with ten other oil producing countries, including Russia, to form what is now known as OPEC+.

Over the weekend, OPEC+ agreed to extend three different cut packages, a decision that amounts to around 5.8 million barrels per day. This move aims to support prices as production from non-OPEC producers such as the US keep on climbing.

Overall, OPEC+ crude oil production accounts for around 40% of global oil production. Almost 80% of the world's proven oil reserves are located in OPEC member countries.

By reducing the global supply of oil, OPEC and its allies can drive up prices and make more money.

Will gas prices rise in the US?

The price of oil makes up half the price of a gallon of gasoline, which means that prices at the pump move in parallel with oil prices.

However, the latest OPEC+ announcement is unlikely to have a major impact on American drivers at first. Patrik DeHaan, GasBuddy's leading oil analyst, to MarketWatch that the extension of the production cuts had already been priced into the market for several weeks.

Others, like Peter McNally, a global industrial materials and energy industry leader at Third Bridge, expect a slight increase in prices. McNally to ABC News He expects gas prices to rise by 20 to 30 cents as an immediate consequence of the production cuts.

The bigger question mark regarding gas prices in the summer is demand.

“GasBuddy's data shows that demand for gasoline fell sharply after Memorial Day and refineries are pumping the largest amount of oil into their plants in years. So it's very likely that gasoline prices will continue to fall through July 4,” DeHaan told MarketWatch.

Today, gasoline costs about the same as it did a year ago, about $3.50 per gallon of regular gasoline, according to the American Automobile Association (AAA)This is well below the average of $5 per gallon in June 2022, but higher than in June 2021 when a gallon of regular gasoline cost $3.09.

Gasoline prices typically rise in the summer as more drivers are on the road and refineries switch to more expensive summer gasoline.

The biggest concern is the impending hurricane season.

“A storm affecting Gulf Coast oil production and refining centers could temporarily drive up prices,” said AAA spokesman Andrew Gross he said recently in a statement.

Since the OPEC+ announcement, the price of Brent crude oil has fallen to its lowest level since February – a sign that sluggish expected demand growth.

Although the extension of the production cuts will not lead to a rapid increase in gas prices for the time being, there is unlikely to be a drastic drop in prices before the elections in November 2024.