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Tuesday June 18, 2024

S Arabia, other OPEC producers announce oil output cuts

By News Desk
April 03, 2023
An oil tanker docked off shore in the Pacific Ocean along the Los Angeles area coastline in the Santa Monica Bay as seen from Palos Verdes Estates, California on March 6, 2023.—AFP
An oil tanker docked off shore in the Pacific Ocean along the Los Angeles area coastline in the Santa Monica Bay as seen from Palos Verdes Estates, California on March 6, 2023.—AFP

RIYADH: Saudi Arabia will voluntarily reduce its oil production by 500,000 barrels per day from May until the end of 2023 in coordination with other members of the oil producers’ alliance, the Saudi Press Agency reported on Sunday.

Russia’s deputy prime minister also said Moscow would extend a voluntary cut of 500,000 bpd until the end of 2023. The UAE, Kuwait, Iraq, Oman and Algeria said they would voluntarily cut output over the same period.

The UAE said it would cut production by 144,000 bpd, Kuwait announced a cut of 128,000 bpd while Iraq said it would cut output by 211,000 bpd and Oman announced a cut of 40,000 bpd. Algeria said it would cut its output by 48,000 bpd.

The Saudi Energy Ministry said in a statement that the Kingdom’s voluntary cut was a precautionary measure aimed at supporting the stability of the oil market.

Cuts by the Saudi Arabia, Iraq, the UAE, Kuwait, Algeria and Oman from May to the end of the year will total more than 1 million barrels per day — the biggest reduction since the OPEC+ slashed 2 million barrels per day in October.

“This voluntary initiative is a precautionary measure taken to ensure market balance,” said UAE Energy Minister Suhail bin Mohammed Al-Mazrouei, according to the official WAM news agency on Sunday.

OPEC producers’ unexpected 1.15 million bpd production cut could lift global oil prices by $10 per barrel, the head of investment firm Pickering Energy Partners said on Sunday.

The output reduction “will firm prices meaningfully,” said Dan Pickering, co-founder of the Houston-based firm. “We will probably get a $10 (per barrel) move in crude,” Pickering said.