Saudi energy minister announced today that Saudi Arabia will be cutting down oil production at a rate of 500,000 barrels per day until the end of 2023, for the sake of stabilizing the oil market. 

Russia reciprocated the decision and announced a downplay of oil production at the same rate. 

Iraq, UAE, Algeria, Kuwait, and Oman will be reportedly following suit to voluntarily cut down on oil production.

• Iraq will cut down oil production by 211,000 bpd
• UAE will cut down oil production by 144,000 bpd
• Algeria will cut down oil production by 48,000 bpd
• Kuwait will cut down oil production by 128,000 bpd
• Oman will cut down oil production by 40,000 bpd

According to Deputy Prime Minister Alexander Novak, Russia will extend its 500,000 barrels per day (bpd) oil output cut until the end of the year.

Within minutes of Saudi Arabia, Kuwait, Oman, Iraq, and the United Arab Emirates' declarations, Russia made the announcement.

"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.

Commenting on the issue, a spokesman for the US National Security Council says OPEC+ production cuts are illogical at this time, given the "uncertainty" in the market.

The head of investment company Pickering Energy Partners stated on Sunday that the unexpected 1.15 million barrel per day output cut by OPEC producers could increase world oil prices by $10 per barrel.

The output reduction "will firm prices meaningfully," said Dan Pickering, co-founder of the Houston-based firm.

Pickering predicted that crude prices would rise by $10 (per gallon) in an interview with Reuters.

Read more: Oil prices fell sharply after reports of UAE mulling OPEC withdrawal

Following the issue of a report by The Wall Street Journal that said the UAE is contemplating its withdrawal from the OPEC oil group, global oil prices have slumped at dramatic levels, with the price of May futures for Brent crude falling by 2.1% to $82.97 per barrel, and April futures for WTI falling by 2.25% to $76.4 as of 14:25 GMT. 

The report cited tensions among Gulf countries being the reason for this possible withdrawal - particularly with Saudi Arabia.

That is because the UAE has long called for an increase in the production of oil which has been constrained by its membership in the cartel, but the Saudis have declined the UAE's request. 

Read more: OPEC cuts down production target for fifth time since April

Back in November, citing economic challenges such as high inflation and interest rate increases, OPEC cut its forecast for 2022 global oil demand growth - cutting down next year’s figure as well. 

"The world economy has entered a period of significant uncertainty and rising challenges in the fourth quarter of 2022," OPEC said in November in a report it published following the energy crisis which followed the war in Ukraine. The report also pointed out that oil demand in 2022 will rise by 2.55 million barrels per day, amounting to a 2.6% increase.