Saudi Arabia extends oil production cut to prop up prices

Saudi Arabia announced on Monday that it would extend its voluntary oil output cut of one million barrels per day for the month of August. The move comes as oil prices continue to slump, and is aimed at supporting the stability of global markets.

The cut, which was first announced in July, leaves daily production by the world’s largest oil exporter at approximately nine million barrels per day. It is the latest in a series of production cuts by OPEC+, an alliance of oil-producing countries, in an effort to prop up prices.

However, these cuts have so far failed to have a lasting impact on prices, which remain well below their levels of a year ago. This is due to a number of factors, including the ongoing war in Ukraine, which has disrupted global energy supplies, and concerns about a global economic slowdown.

Saudi Arabia is hoping that high oil prices will help it finance a major economic restructuring plan that could reduce its reliance on fossil fuels. Analysts say the kingdom needs oil to be priced at $80 per barrel to balance its budget.

Russia, which is also part of the OPEC+ alliance, said on Monday that it would voluntarily cut oil exports by 500,000 barrels per day in August. This is in addition to previously announced production cuts.

The announcement by Russia comes as the country faces Western sanctions over its war in Ukraine. The sanctions have had a significant impact on the Russian economy, and have led to a sharp decline in oil exports.

The cuts to oil production by Saudi Arabia and Russia are a sign that both countries are concerned about the impact of falling prices on their economies. However, it remains to be seen whether these cuts will be enough to stabilize global markets.

In addition to the factors mentioned above, oil prices are also being affected by rising inflation and concerns about a global recession. As a result, it is likely that oil prices will remain volatile in the coming months.