On Monday, Saudi Arabia announced it would extend its oil production cut by one million barrels a day to support prices, while Russia said it would cut its exports by 500,000 barrels.
Saudi Arabia’s cuts, effective from July, will continue into August and “may be extended” beyond that period, the official news agency said, citing an energy ministry source.
“The source confirmed that this additional voluntary cut reinforces the precautionary measures taken by the OPEC+ countries to maintain stability and balance in the oil markets,” the agency added.
The decision keeps the country’s production at about nine million barrels per day.
Announcing the cuts last month after a meeting of oil producers, Saudi Energy Minister Abdelaziz bin Salman specified that it could be “extended”.
In April, several OPEC+ countries, an alliance of members of the Organization of the Petroleum Exporting Countries (OPEC) and 10 allies, including Russia, decided to voluntarily cut their production by about one million barrels per day, which came as a surprise. a decision that momentarily supported prices but failed to keep them high for a long time.
Oil producers have faced falling prices and strong market volatility as a result of the Russian invasion of Ukraine and the slow recovery of the Chinese economy.
Shortly after Saudi Arabia’s announcement, Russia said it would cut crude oil exports by 500,000 barrels a day in August.
“As part of efforts to balance the market, Russia will voluntarily cut oil supplies to markets by 500,000 bpd in August, cutting exports by that amount,” Deputy Prime Minister Alexander Novak, quoted by Russian news agencies, as saying.
Last February, Russia already announced a 500,000 bpd production cut, a measure it said would be in place until the end of 2024. The decision announced on Monday concerns exports, not production.
The market reaction to the decisions voiced by Riyadh and Moscow was restrained. Brent crude, the benchmark in Europe, rose 0.98% to $76.15 a barrel, while US WTI crude rose 1.02% to $71.36, far from the peaks reached in March 2022. at the beginning of the conflict in Ukraine, when prices approached $140. .
Since the beginning of the year, Brent has fallen in price by 11%, and WTI – by 7%.
Author: Portuguese
Source: CM Jornal
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