Saudi Arabia decided to voluntarily reduce its oil production by 1.5 million barrels per day, to the level of 9 million barrels per day, to support oil markets in light of the uncertainty surrounding the global economy.
An official source in the Saudi Ministry of Energy said on Sunday that the additional voluntary cuts in the Kingdom’s oil production, by one million barrels per day, would take effect as of July and for a month that can be extended.
During a meeting on Sunday, OPEC+ countries decided to adjust their production level to 40.4 million barrels per day, starting from January 2024 for a period of one year, and agreed to reduce oil production by 3.66 million barrels per day, announced Russian Deputy Prime Minister Alexander Novak.
The new voluntary cut by Saudi Arabia comes in addition to the OPEC+ agreement.
The Kingdom described the move as a “precautionary measure”, through which it will extend its voluntary cut of 500,000 barrels per day until the end of December 2024, in coordination with some countries participating in the OPEC+ agreement.
UAE Minister of Energy Suhail Al Mazrouei immediately announced that his country would extend its voluntary reduction in oil production of 144,000 barrels per day until the end of December 2024.
“The extension of the voluntary reduction in production comes in coordination with the countries participating in the OPEC+ agreement,” he stated.
Iraq also announced its commitment to the voluntary cut of its oil production of 211,000 barrels per day. Oman and Algeria also decided to cut their production by 40,000 barrels and 48,000 barrels per day, respectively.
Following Sunday’s meeting, Novak said his country would extend its voluntary cut in oil production of 500,000 barrels per day until the end of 2024.
The cuts will be as a precautionary measure, in coordination with the countries participating in the OPEC+ agreement, which had previously announced voluntary cuts in April, he added.
“This voluntary cut will be from the required production level, as agreed upon at the thirty-fifth ministerial meeting of OPEC+ on June 4, 2023,” Novak stressed.
He underscored the ability to “adjust our decisions” to stabilize the oil market, referring to economic developments in China.
“We are closely monitoring China's recovery from the repercussions of the COVID-19 pandemic,” he remarked.
A press release posted on Sunday on the OPEC website stated that an agreement was reached to hold the OPEC+ ministerial meeting every six months. The next meeting will be held in Vienna on November 26.
The Joint Ministerial Monitoring Committee was granted the authority to hold additional meetings, or to request a ministerial meeting for the group at any time to meet “market developments whenever necessary.”