Saudi Arabia and Russia, two major oil exporters, have announced their intention to continue their excess voluntary oil production cuts until the end of the year.
These cuts are being increased due to concerns about demand and economic growth, due to which there is pressure on the crude oil market.
Saudi Arabia will maintain its additional voluntary cuts of 1 million barrels per day (bpd), which translates to a production level of about 9 million bpd for December. The decision to continue these cuts is part of ongoing efforts by OPEC+ countries to support the stability and balance of oil markets.
In response to Saudi Arabia’s announcement, Russia has also confirmed that it will continue an additional voluntary supply cut of 300,000 bpd from its crude oil and petroleum product exports until the end of December.
OPEC+ has been actively enforcing production cuts since last year to maintain market stability. While oil prices reached their highest point in 2023, trading near $98 a barrel for Brent crude in September, they have since softened and hovered around $85 in recent days, despite geopolitical tensions in the Middle East. Were trading at per barrel.
OPEC’s de facto leader Saudi Arabia initiated voluntary cuts in July in addition to a broader supply-limiting agreement established by some OPEC+ members in April.
In September, the state extended its voluntary cuts through the end of the year and committed to reviewing the decision every month.
Markets had widely anticipated Saudi Arabia would confirm an extension of its cuts in December. OPEC+ had earlier decided in June to limit oil supply until 2024.
The alliance is scheduled to convene its next meeting in Vienna on November 26, where it will further evaluate the situation and decide on any necessary adjustments to its oil production policy.