KSA Extends Oil Voluntary Reduction of One Mln bpd
An official source in the Ministry of Energy announced that Saudi Arabia will extend its oil voluntary reduction of one million bpd. This reduction began in July 2023 in coordination with some countries participating in the OPEC+ agreement.
Thus, the Kingdom’s production will be approximately 9 million barrels per day, until the end of March 2024. After that, and to support market stability, KSA will restore these additional reduction amounts gradually, according to market conditions.
“This reduction is in addition to the oil voluntary reduction of 500,000 bpd that the Kingdom had previously announced in April 2023,” added the source. This 500,000 barrels per day reduction will extend until the end of December 2024.
The source confirmed that this additional voluntary reduction comes to strengthen the precautionary efforts made by OPEC+ countries. The efforts aim to support the stability and balance of oil markets.
Voluntary oil Cut
“KSA proceeds its voluntary oil cut of 1 mln bpd. Therefore, the Kingdom’s production in December was about 9 mln bpd,” announced a source of Ministry of Energy early November.
“This decision will be reviewed next month to consider extending or increasing the cut in supply or deepening the production,” added the source.
The voluntary oil output cuts first started in July 2023, following some OPEC+ members’ agreement on limiting oil supply in April. It was later extended till the end of December and is set t to extend till the end of the year.
Besides KSA, Russia has been voluntarily decreasing exports during recent months. It aims to cut exports by 300,000 bpd till the end of the year.
Motives Behind Oil Cut
The oil cut is part of OPEC+ efforts to maintain stability of oil markets, affirmed the source.
Digging deep into motives of this reduction, Financial Times reported that the Crown Prince is aiming to boost oil prices to finance his economic reform program through cutting oil supplies.
The Two Oil Giants stirring concerns
Russia and KSA’s decision is provoking fear of global Inflation.
This decision has been a blow to Biden administration which is trying to keep the prices under control as the elections are approaching.
Related Topics
Saudi Arabia, Russia to Continue Coordination
GASTAT: Saudi’s Sector Grows by 3.6% in Q3
Saudi Arabia Shaking Off Oil-Dependency Reputation
