Saudi Arabia and other Opec+ oil producers on Sunday announced further oil output cuts of around 1.16 million barrels per day, in a surprise move that analysts said would cause an immediate rise in prices and the US called inadvisable, said media reports.
The pledges bring the total volume of cuts by OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, to 3.66 million bpd according to Reuters calculations, equal to 3.7% of global demand.
Sunday's development comes a day before a virtual meeting of an Opec+ ministerial panel, which includes Saudi Arabia and Russia, and which had been expected to stick to 2 million bpd of cuts already in place until the end of 2023.
A Ministry of Energy official stated that the Kingdom of Saudi Arabia will implement a voluntary cut of 500 thousand barrels per day from May till the end of 2023 in coordination with some other OPEC and non-OPEC Participating Countries in the Declaration of Cooperation.
The official emphasized that this is a precautionary measure aimed at supporting the stability of the oil market. This voluntary cut is in addition to the reduction in production agreed at the 33rd Opec and non-Opec Ministerial Meeting on October 5, 2022, stated the report.
The ministry described the move as a “precautionary measure” aimed at stabilizing the oil market. The cuts represent less than 5% of Saudi Arabia's average production of 11.5 million barrels per day in 2022, reported Saudi Press Agency.
The UAE too announced that it will voluntarily cut its oil output by 144,000 bpd, effective May through the end of 2023, in coordination with some countries that are parties to the OPEC+ agreement.
Iraq said it would reduce production by 211,000 barrels per day, Kuwait by 128,000, Kazakhstan by 78,000, Algeria by 48,000 and Oman by 40,000, the report added.