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Saudi, Russia to continue voluntary oil cuts citing demand concerns

Saudi, Russia to continue voluntary oil cuts citing demand concerns

طوبیٰ Tooba 8 months ago 0 3

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The OPEC logo pictured ahead of an informal meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) in Algiers, Algeria, September 28, 2016.—Reuters
The OPEC logo pictured ahead of an informal meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) in Algiers, Algeria, September 28, 2016.—Reuters 

Saudi Arabia and Russia, two leading oil exporters, have announced their intentions to continue their additional voluntary oil output cuts until the end of the year.

These cuts are being extended due to concerns about demand and economic growth, which continue to put pressure on crude oil markets.

Saudi Arabia will maintain its additional voluntary cut of 1 million barrels per day (bpd), which translates to a production level of approximately 9 million bpd for December. The decision to continue this cut is part of ongoing efforts by OPEC+ countries to support the stability and balance of oil markets.

Russia, in response to Saudi Arabia’s announcement, has also confirmed that it will continue its additional voluntary supply cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December.

OPEC+ has been implementing output cuts since the previous year to proactively maintain market stability. While oil prices reached a high point in 2023, trading near $98 per barrel for Brent crude in September, they have since softened and were trading at around $85 per barrel in recent times, despite geopolitical tensions in the Middle East.

Saudi Arabia, the de facto leader of OPEC, initiated the voluntary cuts in July as an addition to the broader supply-limiting agreement first established by some OPEC+ members in April. 

In September, the kingdom extended its voluntary cut until the end of the year and committed to reviewing the decision every month.

The market had widely anticipated that Saudi Arabia would confirm the extension of its cut into December. OPEC+ previously decided in June to limit oil supply into 2024. 

The alliance is scheduled to convene for its next meeting in Vienna on November 26, where it will further evaluate the situation and decide on any necessary adjustments to its oil output policy.

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