Saudi Arabia will extend its voluntary production cut by 1 million barrels per day until the end of the second quarter, the state-owned Saudi Press Agency said He said SundayQuoting an official source at the country's Ministry of Energy.
The announcement stated that Riyadh's crude oil production will reach about 9 million barrels per day until the end of June.
Russian Deputy Prime Minister Alexander Novak said that Russia will reduce its production and export supplies by a total of 471 thousand barrels per day until the end of next June. A report published by Russia's state-owned TASS agency. Moscow volunteered to reduce its supplies by a slightly higher amount of 500,000 barrels per day in the first quarter.
The two main OPEC producers, Iraq and the United Arab Emirates, will also extend voluntary production cuts of 220,000 barrels per day and 163,000 barrels per day, respectively, until the end of the second quarter, according to Google-translated updates from state-owned news agencies. in And Wham.
In November, OPEC+ countries pursued an official policy of collectively reducing their production by 2 million barrels per day until the end of 2024. Separately from the group's official strategy, several OPEC+ producers, including Saudi Arabia and Russia, announced They will do so voluntarily. It reduced its supplies by a total of 2.2 million barrels per day until the end of the first quarter of this year.
The latest announcement of production cuts comes against the backdrop of declining oil prices, which have largely ranged between $75 and $85 per barrel since the beginning of the year, despite OPEC+ supply cuts and ongoing Houthi naval attacks on the vital Red Sea route and threats. The continued risk of an extension of the war waged by Israel against the Iranian-backed Palestinian Hamas movement in the Gaza Strip. Offsetting some of this short-term price support is lower demand amid impending seasonal refinery maintenance in China, the world's largest crude importer, which typically worsens in the second quarter.
Unlike formal policy changes, voluntary cuts do not require unanimous approval by the group during a formal meeting and go beyond the need to distribute production cuts or increases among OPEC+ members. Normally, OPEC+ countries do not object to extracurricular production adjustments, as long as they are in line with the spirit of current policy – currently, complementary cuts are based on existing OPEC+ cuts.
The group's next policy negotiations are scheduled for June, at which point independent third-party data providers will have finalized their assessments of the baselines for the productive capacity of group members – the levels to which each country is allocated a quota. A highly desirable higher baseline results in a higher production cap, allowing producers to benefit from more stable revenues in a rising price environment.
In a surprise move, Aramco, the oil giant controlled by Saudi Arabia, announced in late January that it would suspend its long-term plans to increase its crude oil production capacity from 12 million barrels per day to 13 million barrels per day by 2027, along with the Minister of Energy. Saudi. Later, Prince Abdulaziz bin Salman commented on the decision on the green transition.
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