2023-08-03 16:34:22
Back up to win. Saudi Arabia will extend its one-million-barrel-a-day oil production cut for another month, the world’s largest crude oil exporter announced on Thursday, continuing its strategy to boost prices sharply lower.
Analysts were expecting this second extension of the cuts that began in July when this Saudi policy, also followed by Russia, contributed to a slight rise in the price of black gold, after several weeks of decline. “Saudi Arabia will extend its 1 million barrels per day cut, which came into effect in July, for an additional month,” the Saudi energy ministry said in a statement.
A reduction in production that could continue
This reduction policy will therefore continue in September, and could still be “extended” beyond this period, or even “extended and reinforced”, specified the ministry. “The kingdom’s production for the month of September 2023 will be around nine million barrels per day”, he added, highlighting “the precautionary efforts made by OPEC countries to support stability and ‘equilibrium of the oil markets’.
Oil producers are facing falling prices and high market volatility due to the lingering fallout from Russia’s invasion of Ukraine in February 2022 and China’s faltering economic recovery.
Saudi Arabia is counting on high oil prices to finance a major economic diversification program aimed precisely at lifting the kingdom out of its dependence on crude exports. This Thursday, after a slight drop, crude oil prices started to rise again, immediately after the announcement by Saudi Arabia. The barrel of Brent from the North Sea, for delivery in October, reached 83.62 dollars.
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