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Saudi Arabia to cut oil output by 10 lakh barrels a day

News Desk || risingbd.com

Published: 09:29, 5 June 2023  
Saudi Arabia to cut oil output by 10 lakh barrels a day

Saudi Arabia has announced that it will begin cutting oil production by one million (10 lakh) barrels per day in July to support the ‘stability and balance of oil markets’.

Though the country says it doesn't use the cost of crude to make oil production decisions, the move is considered to be an attempt to prop up oil prices in response to global economic uncertainty and concerns that international demand could drop.

Saudi Arabia has said it will reduce how much oil it sends to the global economy by one million barrels per day (bpd), as the OPEC+ alliance of major oil-producing countries faces flagging oil prices and a looming supply glut.

The kingdom said on Sunday that it would make these production cuts in July to support the sagging cost of crude after two earlier production cuts by OPEC+ members failed to push prices higher.

OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, reached a deal on output policy after seven hours of talks at its headquarters in Vienna and agreed to extend earlier cuts in supply through the end of 2024 by a further total of 1.4 million barrels per day.

However, many of these reductions will not be real as the group lowered the targets for Russia, Nigeria and Angola to bring them into line with their actual current production levels.

In contrast, the United Arab Emirates was allowed to raise output.

OPEC+ pumps around 40 percent of the world’s crude, meaning its policy decisions can have a major impact on oil prices.