Decision to reduce production
The United States is insisting that the demand for crude oil will increase as the corona restrictions in China are fully relaxed and thus the production should be increased. In this situation, OPEC has decided to reduce crude oil production. Saudi Arabia, the largest producer of crude oil in the 13-nation OPEC+ group, has decided to reduce daily crude oil production to 5 lakh barrels.
5 lakh barrels only
Saudi Arabia has offered to cut production despite US pressure to increase crude oil production amid economic fallout from the Russia-Ukraine war. Saudi Arabia has said that it plans to produce only 5 lakh barrels of crude oil per day from May to the end of the current year.
10.23 lakh barrels to decrease
Other OPEC countries have also announced plans to cut crude oil production. Accordingly, Iran has decided to cut its crude oil production by 2,11,000 barrels, Kuwait by 1,28,000 barrels, Oman by 40 thousand and UAE by 1.44 lakh barrels. With this decision by the OPEC countries, the amount of crude oil obtained from the group will decrease to 10.23 lakh barrels.
This is the first time
Russia has also announced plans to cut crude oil production. Russia has said it plans to cut to 5 lakh barrels by the end of the year. Saudi Arabia’s Ministry of Energy said the production cuts are aimed at stabilizing the crude oil market.
Demand for crude oil will rise
Crude oil production has also been cut amid global concerns over rising inflation and the possibility of central banks raising interest rates. The United States is insisting that the demand for crude oil will rise as the corona restrictions in China are fully relaxed and thus the production should be increased.
Will the price of petrol and diesel rise?
However, crude oil producing countries have announced that they will cut production beyond that. The reduction in crude oil production is expected to increase crude oil prices in the international market. It is noteworthy that the impact of this will be reflected in the increase in the price of petrol and diesel.