As Saudi Arabia extends oil production cut, Russia to reduce exports

By Al Mayadeen English
Source: Agencies
3 Jul 2023 15:44

Saudi Arabia says it will extend a voluntary oil production cut of one million barrels per day.

Saudi Aramco's Abqaiq oil processing plant (AFP)

Russia's top energy official announced on Monday that Moscow will voluntarily cut oil exports by 500,000 barrels per day, building on previously declared production cuts.

"As part of efforts to ensure that the oil market remains balanced, Russia will voluntarily reduce its oil supply in the month of August by 500,000 barrels per day, by cutting its exports by that quantity to global markets," Alexander Novak, the Russian Deputy Prime Minister responsible for energy policy, said in comments reported by Russian news agencies.

The same level of Russian oil output was reduced this year as part of Moscow's reaction to Western sanctions imposed over the war in Ukraine.

Concurrently, Saudi Arabia stated on Monday it was extending a voluntary oil production cut of one million barrels per day.

The cut by Saudi Arabia, the world's biggest crude exporter, was first announced after a June meeting of oil producers and took effect at the weekend.

On his account, Saudi Energy Minister Prince Abdulaziz bin Salman noted at the time that it was "extendable".

In a report on Monday declaring that the cut would continue through August, the official Saudi Press Agency said it "can be extended" further, citing an energy ministry source.

"The source confirmed that this additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets," SPA said.

Following the extended announcement made on Monday, the Kingdom's output is now at over nine million bpd.

Last month, oil prices rose as Saudi Arabia reduced output by a million barrels to support prices, while fellow OPEC+ members agreed to extend current cuts until 2024.

Saudi Arabia announced its own fresh reduction, bringing July output to nine million barrels per day.

OPEC+ countries are dealing with dropping oil prices due to expectations that demand would decline as major economies battle to contain rising inflation. Oil has fallen by approximately 10% since April when some OPEC+ members agreed to cut production by more than one million bpd voluntarily in an effort to stop losses.