Saudi Arabia has said that it will cut down in July the amount of oil it sends to the global economy by one million barrels per day (bpd), as the OPEC+ alliance of major oil-producing countries tackle failing oil prices and a looming supply surplus.
The kingdom said on June 4 that it would make these production cuts next month to support the sagging cost of crude after two earlier production cuts by OPEC+ members could not drive prices higher.
OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, reached a deal on output policy after seven hours of talks at its headquarters in Vienna. It was decided to extend earlier cuts in supply through the end of 2024 by a further 1.4 million bpd. Saudi Energy Minister Abdulaziz bin Salman later said in a news conference that Riyadh could extend the cut beyond July if needed.
The group has also 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, and its policy decisions can have a major impact on oil prices. Last year, it agreed to a cut of 2 million bpd, amounting to 2 percent of global demand. In April, it agreed to a surprise voluntary cut of 1.6 million bpd from May till the end of 2023.
