Sunday 2 April 2023

Saudi Arabia, Russia announce oil output cuts

Saudi Arabia and other OPEC Plus oil producers on Sunday announced voluntary cuts to their production, with Riyadh saying it would cut output by 500,000 barrels per day (bpd) from May until the end of 2023.

Russia's Deputy Prime Minister also said Moscow would extend a voluntary cut of 500,000 bpd until the end of 2023.

The United Arab Emirates, Kuwait, Iraq, Oman and Algeria said they would voluntarily cut output over the same time period.

The UAE said it would cut production by 144,000 bpd, Kuwait announced a cut of 128,000 bpd while Iraq said it would cut output by 211,000 bpd and Oman announced a cut of 40,000 bpd. Algeria said it would cut its output by 48,000 bpd.

The Saudi Energy Ministry said in a statement that the kingdom's voluntary cut was a precautionary measure aimed at supporting the stability of the oil market.

Russia will extend 500,000 barrels per day (bpd) oil production cut until the end of the year, Deputy Prime Minister Alexander Novak said on Sunday.

Russia announced the move within minutes of statements by Saudi Arabia, Kuwait, Oman, Iraq and the United Arab Emirates that they were also reducing output until the end of the year. Russia is part of OPEC Plus, which groups the Organization of the Petroleum Exporting Countries and allies.

"Acting as a responsible market participant and as a precautionary measure against further market volatility, the Russian Federation will implement a voluntary cut of 500 thousand barrels per day till the end of 2023, from the average production level as assessed by the secondary sources for the month of February," Novak said in a statement.

The announcement means Russia has now twice extended the output cut that Novak first announced in February this year.

Novak said on Feb. 10 that Russia would reduce production by 500,000 bpd in March. On March 21, he said the cut would continue until the end of June.

On March 24, Novak said Russia was very close to reaching the targeted level of output, which he said would be 9.5 million bpd.

 

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