RIYADH (AFP) – Saudi Arabia said yesterday it was extending a voluntary oil production cut of one million barrels per day (bpd), and Russia said it was slashing exports by 500,000 bpd.
The moves were the latest attempts by major producers to stabilise markets rocked by factors including continued fallout from the war in Ukraine and China’s faltering economic recovery.
The cut by Saudi Arabia, the world’s biggest crude exporter, was first announced after a June meeting of oil producers and took effect at the weekend.
Saudi Energy Minister Prince Abdulaziz bin Salman noted at the time that it was “extendable”. In a report yesterday announcing that the cut would continue through August, the official Saudi Press Agency (SPA) said it “can be extended” further, citing an energy ministry source.
“The source confirmed that this additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets,” SPA said.
Yesterday’s announcement leaves the kingdom’s production at approximately nine million bpd.
Yesterday, Russia unveiled its export cut of 500,000 bpd for August “as part of efforts to ensure that the oil market remains balanced”.
The announcement by Russian deputy prime minister responsible for energy policy Alexander Novak came on the back of cuts to Russian oil production this year by the same volume as part of Moscow’s response to Western sanctions.
The initial market reaction to yesterday’s announcements by Riyadh and Moscow was muted.
Brent was up 0.98 per cent to USD76.15 per barrel, and West Texas Intermediate was up 1.02 per cent to USD71.36 per barrel.
Recent efforts by OPEC+ to bolster prices by reducing output have not succeeded.
In April, several OPEC+ members opted to slash production voluntarily by more than one million bpd – a surprise move that briefly raised prices but failed to bring about lasting recovery.
Brent is down 11 per cent since the beginning of the year and WTI is down seven per cent.
