Saudi Arabia announced on Monday its decision to extend the voluntary oil production cut of one million barrels per day until August. Saudi analysts told Asharq Al-Awsat that the Kingdom’s decision would reduce fluctuations in global oil prices and strengthen the efforts of the OPEC+ alliance to support, stabilize and control international markets.
Saudi Arabia’s decision was followed by a similar step by Russia, which also announced reducing its oil exports by 500,000 barrels per day in August.
Experts stressed the importance of voluntary price cuts to achieve price stability and protect producers and consumers alike, noting that the Saudi decision also limits the contraction of global economic growth.
Dr. Mohammad al-Sabban, former senior adviser to the Saudi Energy Minister, told Asharq Al-Awsat that the Kingdom’s decision to extend the voluntary cut achieves stability in oil markets, which are witnessing great fluctuations. He also emphasized that Saudi Arabia was assuming a responsible role in controlling markets, in cooperation with oil-producing countries.
Al-Sabban underscored the importance of the voluntary cut in boosting the role of OPEC+ in the markets, as it confirms that the organization is seeking to achieve stability in the global oil markets.
Economist Dr. Fahd bin Jumaa said the Kingdom, with its recent decision, confirms that it will bear the loss of sales of one million barrels per day, out of concern for market stability.
In remarks to Asharq Al-Awsat, he said: “OPEC+ is making intense efforts to achieve its goals in stabilizing the oil markets, given the global economic situation...”
An official source in the Ministry of Energy said that the Kingdom would extend the voluntary cut of one million barrels per day, which began in July, for another month, adding that the cut could be extended beyond that period.
“The Kingdom’s production for the month of August 2023 will be approximately 9 million barrels per day,” Saudi state news agency SPA quoted an official source in the ministry as saying.
Saudi Energy Minister Prince Abdulaziz bin Salman had previously stated that the cut could be “extendable.”
Shortly after Monday’s announcement, Russian Deputy Prime Minister Alexander Novak said Moscow would cut its oil exports by 500,000 barrels per day in August.
Later on Monday, Algeria said it would cut oil output by an extra 20,000 barrels from Aug. 1-31 to support Saudi Arabia and Russia’s efforts to balance and stabilize oil markets, its energy ministry said.
